EXHIBIT 99.2
AMENDMENT, MODIFICATION, RESTATEMENT AND
GENERAL PROVISIONS AGREEMENT
dated as of October 6, 2000
among
THE WARNACO GROUP, INC.,
WARNACO INC.,
THE OTHER SUBSIDIARIES OF THE WARNACO GROUP, INC.
PARTY HERETO,
THE BANK OF NOVA SCOTIA and CITIBANK, N.A.,
as Debt Coordinators,
THE BANK OF NOVA SCOTIA,
as Administrative Agent
and
STATE STREET BANK AND TRUST COMPANY,
as Collateral Trustee
TABLE OF CONTENTS
SECTION PAGE
Article I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Definitions in Intercreditor Agreement.........................1
SECTION 1.2. Accounting Terms ..............................................1
Article II
AMENDMENTS AND MODIFICATIONS TO THE EXISTING
FACILITIES; PROVISIONS APPLICABLE TO THE COVERED
FACILITIES AND THE LOAN DOCUMENTS
SECTION 2.1. Amendment, Modification and Restatement........................2
SECTION 2.2. Commitment Termination; Maturity Date..........................2
SECTION 2.3. Use of Proceeds................................................2
SECTION 2.4. Interest Rate; Commitment/Facility Fees........................2
SECTION 2.5. Affirmative Covenants...........................................
SECTION 2.6. Negative Covenants............................................10
SECTION 2.7. Financial Covenants...........................................20
SECTION 2.8. Reporting Requirements........................................22
SECTION 2.9. Mandatory Payments............................................23
SECTION 2.10. Release of Collateral........................................24
SECTION 2.11. Increased Costs, Etc.........................................24
SECTION 2.12. Taxes 26
SECTION 2.13. Payments and Computations....................................26
SECTION 2.14. Certain Post-Closing Matters.................................26
SECTION 2.15. Successor Agent..............................................26
SECTION 2.16. Certain Amendments...........................................26
Article III
CONDITIONS OF LENDING AND EXTENSIONS OF CREDIT
SECTION 3.1. Conditions Precedent to Each Credit Extension.................32
Article IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of the Loan Parties............33
Article V
EVENTS OF DEFAULT
SECTION 5.1. Events of Default.............................................39
Article VI
CONDITIONS OF EFFECTIVENESs
SECTION 6.1. Conditions of Effectiveness...................................43
SECTION 6.2. Determinations Under Section 6.1..............................49
Article VII
EFFECTIVE DATE PAYMENTS AND COMMITMENT REDUCTIONS
SECTION 7.1. Effective Date Facility Reductions............................49
SECTION 7.2. Extension Fee.................................................49
SECTION 7.3. Approval Fee..................................................49
Article VIII
THE DEBT COORDINATORS, ADMINISTRATIVE AGENT
AND COLLATERAL TRUSTEE
SECTION 8.1. Duties. 50
SECTION 8.2. Costs and Expenses............................................50
Article IX
MISCELLANEOUS
SECTION 9.1. Notices, Etc..................................................51
SECTION 9.2. Amendments....................................................51
SECTION 9.3. No Waiver; Remedies...........................................51
SECTION 9.4. Execution in Counterparts.....................................51
SECTION 9.5. Binding Effect................................................51
SECTION 9.6. Jurisdiction; Process Agent; Judgment Currency;
Waiver of Immunities; Etc...................................52
SECTION 9.7. Governing Law.................................................53
SECTION 9.8. Waiver of Jury Trial..........................................53
SECTION 9.9. Appointment and Acknowledgment ...............................53
SECTION 9.10. Conflict with Other Agreements...............................53
SECTION 9.11. Foreign Subsidiary Collateral Limitation.....................53
ANNEXES
Annex A - Definitions
SCHEDULES
Schedule I - Projected Capital Expenditures
Schedule II - Projected Securitization Facility Amount
Schedule III - Certain Restrictions
Schedule IV - Certain Foreign Collateral Documents
Schedule 2.6(b) - Certain Debt
Schedule 2.6(d)(iii) - Certain Assets
Schedule 2.6(d)(vi) - Excluded Property
Schedule 2.6(e) - Certain Payments
Schedule 2.14(e) - Certain Post-Closing Matters
Schedule 4.1(b) - Subsidiaries
Schedule 4.1(d) - Certain Actions
Schedule 4.1(p) - ERISA
Schedule 4.1(r) - Tax
Schedule 4.1(t) - Liens
Schedule 4.1(u) - Real Property
Schedule 4.1(v) - Leases
Schedule 4.1(w) - Investments
Schedule 4.1(x) - Intellectual Property
Schedule 7.1 - Facility Reductions
EXHIBITS
Exhibit A - Form of Security Agreement
Exhibit B - Form of Domestic Subsidiary Guaranty
Exhibit C - Form of Parent Guaranty
Exhibit D - Form of Mortgage
Exhibit E-1 - Form of Intellectual Property Security Agreement
[U.S Parties]
Exhibit E-2 - Form of Intellectual Property Security Agreement
[Foreign Parties]
Exhibit F - Form of Collateral Trust Agreement
Exhibit G - Form of Joinder Agreement
Exhibit ▇-▇ - ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Counsel to the
Loan Parties
Exhibit H-2 - Form of Opinion of France Counsel to the Loan
Parties
Exhibit H-3 - Form of Opinion of Germany Counsel to the Loan
Parties
Exhibit H-4 - Form of Opinion of Netherlands Counsel to the Loan
Parties
Exhibit H-5 - Form of Opinion of Canada Counsel to the Loan
Parties
Exhibit H-6 - Form of Opinion of Tennessee Counsel to the Loan
Parties
Exhibit H-7 - Form of Opinion of Pennsylvania Counsel to the Loan
Parties
Exhibit H-8 - Form of Opinion of Connecticut Counsel to the Loan
Parties
Exhibit H-9 - Form of Opinion of Georgia Counsel to the Loan
Parties
Exhibit H-10 - Form of Opinion of New York Counsel to the Loan
Parties
Exhibit H-11 - Form of Opinion of General Counsel to the Loan
Parties
Exhibit H-12 - Form of Opinion of Intellectual Property Counsel
to the Loan Parties
AMENDMENT, MODIFICATION, RESTATEMENT AND GENERAL PROVISIONS
AGREEMENT (this "Agreement") dated as of October 6, 2000 among The Warnaco
Group, Inc. ("Group"), Warnaco Inc. ("Warnaco"), the other direct and
indirect Subsidiaries of Group party hereto from time to time, The Bank of
Nova Scotia ("Scotiabank"), as Administrative Agent (the "Administrative
Agent"), Scotiabank and Citibank, N.A. ("Citibank"), as Debt Coordinators
(the "Debt Coordinators"), for themselves and as representative of each of
the Lender Parties, and STATE STREET BANK AND TRUST COMPANY, as Collateral
Trustee (the "Collateral Trustee").
RECITALS
A. Group and certain of its Subsidiaries have entered into
that certain Intercreditor Agreement dated as of the date hereof (the
"Intercreditor Agreement") with Scotiabank and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
("SSBI"), as Lead Arrangers, Scotiabank, SSBI, ▇▇▇▇▇▇ Guaranty Trust
Company of New York, Commerzbank A.G. and Societe Generale, as Arrangers
and the other financial institutions from time to time parties thereto.
B. The parties desire to enter into this Agreement to, among
other things, (a) amend, modify, restate and, in certain cases, extend the
Existing Facilities in accordance with the terms and conditions set forth
in this Agreement, (b) provide for certain common terms to be applicable to
both the Existing Facilities and the New Facilities and (c) provide for the
giving of certain guarantees and the granting of security interests in
certain collateral as security for the Obligations of the Loan Parties
under the Covered Facilities.
NOW, THEREFORE, in consideration of the premises and for
other valuable consideration, the receipt and sufficiency of which the
parties acknowledge, the parties agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Definitions. As used in this Agreement, terms
have the meanings as specified in Part I of Annex A hereto, and the rules
of interpretation and construction set forth in Part II of such Annex A
shall apply.
SECTION 1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed, and all covenants and other
financial calculations shall be made (except to the extent explicitly
provided herein), in accordance with generally accepted accounting
principles as in effect on the Effective Date ("GAAP"); provided that all
effects resulting from any change in GAAP relating to the Equity
Derivatives enacted prior to the Effective Date shall be eliminated from
all covenant and financial calculations.
ARTICLE II
AMENDMENTS AND MODIFICATIONS TO THE EXISTING
FACILITIES; PROVISIONS APPLICABLE TO THE COVERED
FACILITIES AND THE LOAN DOCUMENTS
SECTION 2.1. Amendment, Modification and Restatement. On and
as of the Effective Date, upon satisfaction of the conditions specified in
Article VI hereof, each of the Existing Facilities is hereby amended and
modified as provided in this Agreement, with the affirmative, negative and
financial covenants and undertakings corresponding to affirmative, negative
and financial covenants (including those covenants and undertakings in
respect of the providing of guarantees or the pledge of collateral),
reporting requirements, mandatory prepayment requirements, collateral
release provisions, increased cost provisions, tax gross-up provisions,
allocation of prepayment provisions, provisions related to market
disruption and illegality events, representations and warranties, and event
of default provisions (other than those relating to payment defaults) of
each Covered Facility being replaced and superseded by the terms and
provisions of this Agreement and the other Loan Documents (provided that
those provisions in the Existing Facilities which require L/C Related Liens
be created or incurred in applicable circumstances shall continue in full
force and effect and provided, further, that the terms of the Equity
Derivatives shall continue in full force and effect), and each such
Existing Facility shall thereupon be deemed to be restated in its entirety
as in effect immediately prior to the effectiveness of this Agreement and
as amended and modified hereby. All existing guarantees by any Warnaco
Entity under any Covered Facility are hereby amended and restated in their
entirety by the Subsidiary Guaranty or the Parent Guaranty, as the case may
be.
SECTION 2.2. Commitment Termination; Committed Facilities;
Maturity Date. The commitment termination date or, as applicable, maturity
date for each loan and other credit extension under each of the Extending
Facilities, shall be extended to the Termination Date; provided that the
Loans, Acceptances and reimbursement obligations under (and as defined in)
the Trade Credit Facility shall continue to be payable in accordance with
the terms of the Trade Credit Facility. Uncommitted Facilities shall become
committed facilities as of the Effective Date and shall mature on the
Termination Date, subject to the limitations set forth on Schedule 7.1. The
commitment termination date or, as applicable, maturity date for each loan
and other credit extension under each of the other Existing Facilities
shall remain unchanged.
SECTION 2.3. Use of Proceeds. The proceeds of all loans,
letters of credit, bankers' acceptances and other credit extensions under
each Existing Facility shall be used solely as specified in such Existing
Facility.
SECTION 2.4. Interest Rate; Commitment/Facility Fees. (a)
Notwithstanding anything in the Covered Facilities to the contrary, with
respect to each of the Existing Facilities, (i) the "Applicable Margin" (or
other designation for the percentage margin per annum over the applicable
rate of interest in such Existing Facility) and (ii), the fees for issuing
standby letters of credit, bankers' acceptances and bankers guarantees,
shall in each case be amended to mean, for any date, a percentage per annum
determined by the Debt Rating in effect on such date as set forth below:
Standby Letter of
Credit Fees;
Bankers' Guarantee/
Base Rate Acceptance Fees;
or Eurodollar Rate
Rating Prime Rate Advances; Equity
Level Debt Rating Advances Derivative Notes
Level 1 BBB+ or Baa1 or 0.25% 1.25%
higher
Level 2 BBB or Baa2 or 0.50% 1.50%
higher
▇▇▇▇▇ ▇ ▇▇▇- ▇▇▇ ▇▇▇▇ 0.75% 1.75%
or higher
▇▇▇▇▇ ▇ ▇▇▇- or higher and 1.00% 2.00%
Ba1,
or Baa3 or higher
and BB+
▇▇▇▇▇ ▇ BB+ and Ba1 1.50% 2.50%
or higher
Level 6 BB or Ba2 2.00% 3.00%
or higher
▇▇▇▇▇ ▇ Lower than 2.50% 3.50%
BB or Ba2
provided that (i) until the date which is 6 months after the Effective
Date, Level 4 pricing shall apply if the Debt Rating otherwise qualifies as
▇▇▇▇▇ ▇, ▇ ▇▇ ▇, (▇▇) each of the foregoing percentages applicable to
Levels 5, 6 and 7 will increase by 0.50% starting on the date which is 12
months after the Effective Date, such increase to be effective for the
period during which Designated Capital Markets Transactions yielding Net
Cash Proceeds of $300,000,000 or more have not occurred and (iii) for the
period of time following the occurrence and during the continuance of an
Event of Default, each of the foregoing percentages (after giving effect to
any other increase then in effect) will increase by an additional 2.00% per
annum.
(b) With respect to each of the Existing Facilities, the
fees payable with respect to documentary letters of credit shall be amended
to mean, for any date, a percentage per annum determined by the Debt Rating
in effect on such date as set forth below:
------------------------- --------------------- ----------------------
Rating Applicable Percentage
Level Debt Rating
------------------------- --------------------- ----------------------
Level 1 BBB+ or Baa1 or 0.375%
higher
------------------------- --------------------- ----------------------
Level 2 BBB or Baa2 or 0.450%
higher
------------------------- --------------------- ----------------------
▇▇▇▇▇ ▇ ▇▇▇- ▇▇▇ ▇▇▇▇ 0.525%
or higher
------------------------- --------------------- ----------------------
▇▇▇▇▇ ▇ ▇▇▇- or higher and 0.600%
Ba1,
or Baa3 or higher
and BB+
------------------------- --------------------- ----------------------
▇▇▇▇▇ ▇ BB+ and Ba1 0.750%
or higher
------------------------- --------------------- ----------------------
Level 6 BB or Ba2 1.000%
or higher
------------------------- --------------------- ----------------------
Level 7 Lower than 1.250%
BB or Ba2
------------------------- --------------------- ----------------------
provided that (i) until the date which is 6 months after the Effective
Date, Level 4 pricing shall apply if the Debt Rating otherwise qualifies as
▇▇▇▇▇ ▇, ▇ ▇▇ ▇ ▇▇▇ (▇▇) for the period of time following the occurrence
and during the continuance of an Event of Default, each of the foregoing
percentages (after giving effect to any other increase then in effect) will
increase by an additional 2.00% per annum.
(c) With respect to (i) each of the Revolving Facilities
and (ii) the Trade Credit Facility, the "facility fee" or "commitment fee",
as applicable, (or other designation for the fee paid based on the unused
portion of the revolving or letter of credit commitments thereunder) shall
be amended to mean a percentage per annum determined by the Debt Rating in
effect on such date as set forth below:
------------------------- --------------------- ----------------------
Rating Applicable Percentage
Level Debt Rating
------------------------- --------------------- ----------------------
Level 1 BBB+ or Baa1 or 0.25%
higher
------------------------- --------------------- ----------------------
Level 2 BBB or Baa2 or 0.30%
higher
------------------------- --------------------- ----------------------
▇▇▇▇▇ ▇ ▇▇▇- ▇▇▇ ▇▇▇▇ 0.35%
or higher
------------------------- --------------------- ----------------------
▇▇▇▇▇ ▇ ▇▇▇- or higher and 0.40%
Ba1,
or Baa3 or higher
and BB+
------------------------- --------------------- ----------------------
▇▇▇▇▇ ▇ BB+ and Ba1 0.50%
or higher
------------------------- --------------------- ----------------------
Level 6 BB or Ba2 0.625%
or higher
------------------------- --------------------- ----------------------
Level 7 Lower than 0.75%
BB or Ba2
------------------------- --------------------- ----------------------
provided that until the date which is 6 months after the Effective Date,
Level 4 pricing shall apply if the Debt Rating otherwise qualifies as Level
1, 2 or 3.
SECTION 2.5. Affirmative Covenants. Until the Debt
Termination Date, each respective Loan Party agrees as follows:
(a) Compliance with Laws, Etc. It will comply, and cause
each of its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and Environmental Laws, except
where the failure to so comply would not reasonably be expected to have a
Material Adverse Effect.
(b) Payment of Taxes, Etc. It will pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, (i) all taxes (excluding state and local taxes that are
not material), assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all taxes and other lawful claims that, if
unpaid, might by law become a Lien upon its property; provided, however,
that neither Group nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being contested
in good faith and by proper proceedings and as to which appropriate
reserves are being maintained in accordance with GAAP, unless and until any
Liens resulting therefrom attach to its property and become enforceable
against its other creditors so long as any such amount shall not exceed
$10,000,000 in the aggregate.
(c) Compliance with Environmental Laws. It will comply,
and cause each of its Subsidiaries and all lessees and other Persons
operating or occupying its properties to comply, in all material respects,
with all applicable Environmental Laws and Environmental Permits; obtain
and renew and cause each of its Subsidiaries to obtain and renew all
material Environmental Permits necessary for its operations and properties;
and conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with and to
the extent required by all applicable Environmental Laws; provided,
however, that neither Group nor any of its Subsidiaries shall be required
to undertake any such cleanup, removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with
respect to such circumstances.
(d) Maintenance of Insurance. It will maintain, and cause
each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations (i) in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses and owning properties in the same general areas in which Group
or such Subsidiary operates and (ii) as otherwise specified in Section 11
of the Security Agreement and in Section 1.05 of each Mortgage.
(e) Preservation of Corporate Existence, Etc. It will
preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises (except
for the failure to pay any franchise tax, which failure is promptly cured);
provided, however, that Group and its Subsidiaries may consummate any
merger or consolidation permitted under Section 2.6(c); and provided
further that neither Group nor any of its Subsidiaries shall be required to
preserve any right, permit, license, approval, privilege or franchise if
the Board of Directors of Group or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of Group or such Subsidiary, as the case may be, and that the loss thereof
is not disadvantageous in any material respect to Group, such Subsidiary or
the Lender Parties.
(f) Visitation Rights. It will at any reasonable time and
from time to time, permit any of the Agents or any of the Lender Parties,
or any agents or representatives thereof, upon reasonable notice to Group,
to examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, Group and any of its Subsidiaries,
and to discuss the affairs, finances and accounts of Group and any of its
Subsidiaries with any of their officers or directors and, in the presence
of any officer or director of Group, with their independent certified
public accountants.
(g) Keeping of Books. It will keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which full and
correct entries shall be made of all financial transactions and the assets
and business of Group and each such Subsidiary in accordance with GAAP.
(h) Maintenance of Properties, Etc. It will maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, all
of its properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(i) Compliance with Terms of Leaseholds. It will (i) make
all payments and otherwise perform all obligations in respect of all leases
of real property to which Group or any of its Subsidiaries is a party, (ii)
keep such leases in full force and effect and not allow such leases to
lapse or be terminated or any rights to renew such leases to be forfeited
or cancelled, (iii) notify the Administrative Agent of any default by any
party with respect to such leases and cooperate with the Debt Coordinators
in all respects to cure any such default, and (iv) cause each of its
Subsidiaries to do so, except, in any of the foregoing clauses (i) through
(iv), where the failure to do so, either individually or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect.
(j) Transactions with Affiliates. It will conduct, and
cause each of its Subsidiaries to conduct, other than with respect to
transactions among Group and/or any Subsidiaries, all transactions
otherwise permitted under the Loan Documents with any of their Affiliates
on terms that are no less favorable to it or such Subsidiary than it would
obtain in a comparable arm's-length transaction with a Person not an
Affiliate, provided, however, that the foregoing restriction shall not
apply to transactions pursuant to any agreement referred to in Section
2.6(a)(iv), and provided further that no Loan Party shall engage in any
transaction with any other Loan Party or any Subsidiary of a Loan Party
that would render such Loan Party or Subsidiary insolvent or cause a
default under, or a breach of, any material contract to which such Loan
Party or Subsidiary is a party.
(k) Covenant to Guarantee Obligations and Give Security.
Upon the (v) formation or acquisition of any Domestic Subsidiaries by Group
or any of its Domestic Subsidiaries after the Effective Date, (w) formation
or acquisition of any Included Foreign Subsidiary by Group or any of its
Subsidiaries after the Effective Date, (x) receipt of notice by the
Administrative Agent pursuant to Section 2.8(i) to the effect that a
Foreign Subsidiary has, during the period described in such notice, become
an Included Foreign Subsidiary, (y) acquisition after the Effective Date of
any property by any Credit Party (other than Excluded Property), and such
property, in the judgment of the Debt Coordinators, shall not already be
subject to a perfected first priority security interest in favor of the
Collateral Trustee for the benefit of the Secured Parties or (z), with
respect to clause (vii) below, upon the request of the Debt Coordinators
after the occurrence and during the continuance of a Default, then Group
will, or will cause its Subsidiaries to, in each case at such Credit
Party's expense:
(i) in connection with the formation or acquisition of a
Subsidiary, or a Foreign Subsidiary becoming an Included Foreign
Subsidiary, in each case as specified above, within 30 days after
such formation or acquisition, or in the case of clause (x) above,
within 30 days after the delivery of such notice, cause each such
(A) Domestic Subsidiary to duly execute and deliver to the
Collateral Trustee a Domestic Subsidiary Guaranty Supplement and
(B) Included Foreign Subsidiary to duly execute and deliver to the
Collateral Trustee a guaranty or guaranty supplement, in form and
substance reasonably satisfactory to the Debt Coordinators,
guaranteeing such of the other Foreign Subsidiaries' Obligations
under those Loan Documents and Covered Facilities the result of
which, in each case under this clause (B), is reasonably
determined by the Debt Coordinators to not impose any material
adverse tax consequences on Group and its Subsidiaries, taken as a
whole; provided that the Debt Coordinators may extend the 30 day
time periods specified in this subsection (i) by up to an
additional 45 days if requested by Group,
(ii) within 30 days after such formation or acquisition,
or in the case of clause (x) above, within 30 days after the
delivery of such notice, furnish to the Collateral Trustee a
description of the real and personal properties of such Domestic
Subsidiary or Included Foreign Subsidiary and their respective
Subsidiaries in Included Foreign Jurisdictions in detail
reasonably satisfactory to the Debt Coordinators,
(iii) within 60 days after such formation or acquisition,
or in the case of clause (x) above, within 60 days after the
delivery of such notice, cause such Domestic Subsidiary or
Included Foreign Subsidiary to duly execute and deliver, (A) and
cause each such Domestic Subsidiary and (with respect to stock
pledges) each direct and indirect parent of such Domestic
Subsidiary and each Included Foreign Subsidiary (if it has not
already done so) to duly execute and deliver, to the Collateral
Trustee mortgages with respect to Material Real Property, lease
assignments or mortgages with respect to Material Leased Property,
pledges, security agreement supplements, intellectual property
security agreement supplements and other security agreements, all
as specified by and in form and substance reasonably satisfactory
to the Debt Coordinators, securing payment of all the Obligations
of the applicable Credit Party under the Loan Documents and the
Covered Facilities (provided that none of such agreements shall
cover Excluded Property) and (B) with respect to each first-tier
Foreign Subsidiary of Group or such Domestic Subsidiary, to the
Collateral Trustee a pledge of 66% of the shares of capital stock
(or other Equity Interests) of such first-tier Foreign Subsidiary,
securing payment of all the Obligations of Group or the applicable
Domestic Subsidiary under the Loan Documents and the Covered
Facilities; provided that the Debt Coordinators may extend the 60
day time periods specified in this subsection (iii) by up to an
additional 45 days if requested by Group,
(iv) within 60 days after such formation or acquisition,
or in the case of clause (x) above, within 60 days after the
delivery of such notice, take, and cause such Credit Party to
take, whatever action (including, without limitation, the
recording of mortgages, the filing of Uniform Commercial Code
financing statements, the giving of notices and the endorsement of
notices on title documents) may be necessary or advisable in the
reasonable judgment of the Debt Coordinators to vest in the
Collateral Trustee (or in any representative of the Collateral
Trustee designated by it) valid and subsisting Liens on the
properties purported to be subject to the mortgages, pledges,
assignments, security agreement supplements, intellectual property
security agreement supplements and security agreements delivered
pursuant to this Section 2.5(k), enforceable against all third
parties in accordance with their terms; provided that the Debt
Coordinators may extend the 60 day time periods specified in this
subsection (iv) by up to an additional 45 days if requested by
Group,
(v) within 60 days after such formation or acquisition,
or in the case of clause (x) above, within 60 days after the
delivery of such notice, deliver to the Collateral Trustee, upon
the request of the Debt Coordinators in their sole discretion, a
signed copy of a favorable opinion, addressed to the Collateral
Trustee and the other Secured Parties, of counsel for the Credit
Parties acceptable to the Debt Coordinators as to the matters
contained in clauses (i) and (iii) above, as to such guaranties,
guaranty supplements, mortgages, pledges, assignments, security
agreement supplements, intellectual property security agreement
supplements and security agreements being legal, valid and binding
obligations of each Credit Party party thereto enforceable in
accordance with their terms, as to the matters contained in clause
(iv) above, as to such recordings, filings, notices, endorsements
and other actions being sufficient to create valid perfected Liens
on such properties, and as to such other matters as the Debt
Coordinators may reasonably request; provided that the Debt
Coordinators may extend the 60 day time periods specified in this
subsection (v) by up to an additional 45 days if requested by
Group,
(vi) within 60 days after such formation or acquisition,
or in the case of clause (x) above, within 60 days after the
delivery of such notice, deliver, upon the reasonable request of
the Debt Coordinators, to the Collateral Trustee with respect to
each parcel of Material Real Property owned, or Material Leased
Property held, by the entity that is the subject of such request,
formation or acquisition, such documents and reports of the type
specified in Section 6.1(a)(v) hereof and (if available)
engineering, soils, environmental assessment and other reports,
each in scope, form and substance reasonably satisfactory to the
Debt Coordinators, provided however that to the extent that Group
or any of its Subsidiaries shall have otherwise received any of
the foregoing items with respect to such Material Real Property or
Material Leased Property, such items shall, promptly after the
receipt thereof, be delivered to the Debt Coordinators; provided
further that the Debt Coordinators may extend the 60 day time
periods specified in this subsection (vi) by up to an additional
45 days if requested by Group,
(vii) upon request of the Debt Coordinators after the
occurrence and during the continuance of a Default, (A) promptly
cause to be deposited any and all cash dividends paid or payable
to it or any of its Subsidiaries from any of its Subsidiaries from
time to time into the Collateral Account, and (B) with respect to
all other dividends paid or payable to it or any of its
Subsidiaries from time to time, promptly execute and deliver, or
cause such Subsidiary to promptly execute and deliver, as the case
may be, any and all further instruments and take or cause such
Subsidiary to take, as the case may be, all such other action as
the Debt Coordinators may deem necessary or desirable in order to
obtain and maintain from and after the time such dividend is paid
or payable a perfected, first priority Lien on and security
interest in such dividends, and
(viii) at any time and from time to time, promptly
execute and deliver any and all further instruments and documents
(including, to the extent not previously delivered, a supplement
to this Agreement, in form and substance reasonably acceptable to
the Debt Coordinators) and take all such other action as the Debt
Coordinators may deem reasonably necessary or desirable in
obtaining the full benefits of, or in perfecting and preserving
the Liens of, such guaranties, mortgages, pledges, assignments,
security agreement supplements, intellectual property security
agreement supplements and security agreements.
(l) Further Assurances. Group will promptly upon request
by any Lender Party through the Debt Coordinators (i) correct, and cause
each of its Subsidiaries promptly to correct, any material defect or error
that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (ii) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, conveyances, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments as
any Lender Party through the Debt Coordinators, may reasonably require from
time to time in order to (A) carry out more effectively the purposes of the
Loan Documents, (B) to the fullest extent permitted by applicable law,
subject any Credit Party's properties, assets, rights or interests (other
than Excluded Property) to the Liens now or hereafter intended to be
covered by any of the Collateral Documents, (C) perfect and maintain the
validity, effectiveness and priority of any of the Collateral Documents and
any of the Liens intended to be created thereunder and (D) assure, convey,
grant, assign, transfer, preserve, protect and confirm more effectively
unto the Secured Parties the rights granted or now or hereafter intended to
be granted to the Secured Parties under any Loan Document or under any
other instrument executed in connection with any Loan Document to which any
Credit Party is or is to be a party, and cause each of its Subsidiaries
which is a Credit Party to do so.
(m) Preparation of Environmental Reports. At the request
of the Debt Coordinators from time to time after receipt of a notice of the
type specified in Section 2.8(j), Group will provide to the Lender Parties
within 60 days after such request, at its own expense, an environmental
assessment report for the applicable property described in such notice,
prepared by an environmental consulting firm reasonably acceptable to the
Debt Coordinators, indicating the presence of Hazardous Materials that
could reasonably be expected to give rise to a material liability and the
estimated cost of any compliance, removal or remedial action in connection
with any Hazardous Materials that could reasonably be expected to give rise
to a material liability on such properties; without limiting the generality
of the foregoing, if the Debt Coordinators determine at any time that a
material risk exists that any such report will not be provided within the
time referred to above, the Debt Coordinators may retain an environmental
consulting firm to prepare such report at the expense of Group, and Group
hereby grants and agrees to cause any Subsidiary that owns any property
described in such request to grant at the time of such request to the Debt
Coordinators, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to
enter onto their respective properties to undertake such an assessment, and
to, or to cause its Subsidiaries to, cooperate in all reasonable respects
with the preparation of such assessment.
SECTION 2.6. Negative Covenants. Until the Debt
Termination Date, each respective Loan Party agrees as follows:
(a) Liens, Etc. Group will not create, incur, assume or
suffer to exist, or permit any of its Subsidiaries to create, incur, assume
or suffer to exist, any Lien on or with respect to any of its properties of
any character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit any of
its Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names any
Loan Party or any of its Subsidiaries as debtor, or sign or suffer to
exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 4.1(t) hereto, and the replacement or renewal of any such
Lien upon or in the same property theretofore subject to such
Lien, together with the replacement, extension or renewal (without
increase in the amount or change in any direct or contingent
obligor) of the Debt secured thereby;
(iv) Liens on receivables of any kind (and in property
securing or otherwise supporting such receivables) not in excess
of $10,000,000 in the aggregate in connection with agreements for
limited recourse sales or financings by Group or any of its
Subsidiaries for cash of such receivables or interests therein,
provided that (A) any such agreement is of a type and on terms
customary for comparable transactions in the good faith judgment
of the Board of Directors of Group and (B) such transaction does
not create any interest in any asset other than receivables (and
property securing or otherwise supporting such receivables),
related general intangibles and proceeds of the foregoing,
(v) purchase money Liens upon or in real property or
equipment acquired or held by Group or any of its Subsidiaries in
the ordinary course of business to secure the purchase price of
such property or equipment or to secure Debt incurred solely for
the purpose of financing the acquisition of any such property or
equipment to be subject to such Liens or incurred in connection
with a Specified Sale-Leaseback Transaction, or Liens existing on
any such property or equipment at the time of acquisition (other
than any such Liens created in contemplation of such acquisition
that do not secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount; provided, however, that no such Lien shall extend to or
cover any property other than the property or equipment being
acquired and the proceeds thereof, and no such extension, renewal
or replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or
replaced; and provided further that the aggregate principal amount
of the Debt secured by Liens permitted by this clause (v) shall
not exceed the amount permitted under Section 2.6(b)(iii) at any
time outstanding;
(vi) Liens securing Capitalized Leases;
(vii) any interest or title of a lessor, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to
leases permitted by the Loan Documents;
(viii) Liens securing the Securitization Facility;
(ix) L/C Related Liens; and
(x) other Liens securing obligations in an amount not to
exceed $10,000,000 in an aggregate amount outstanding at any time.
(b) Debt. Group will not create, incur, assume or suffer
to exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Debt, except:
(i) Debt under the Covered Facilities; provided that all
New Facilities will be subject to the approval procedures
specified in Section 2.4 of the Intercreditor Agreement,
(ii) Designated Capital Markets Transactions,
(iii) Debt secured by Liens permitted by Section
2.6(a)(v) not to exceed in the aggregate $5,000,000 at any time
outstanding,
(iv) Capitalized Leases not to exceed in the aggregate
$15,000,000 at any time outstanding,
(v) Debt in respect of Hedge Agreements designed to hedge
against fluctuations in interest rates or foreign exchange rates
incurred in the ordinary course of business and consistent with
prudent business practice,
(vi) Debt owing by any U.S. Credit Party to (or
Contingent Obligations made in respect of the obligations of any
U.S. Credit Party by) any other U.S. Credit Party, (x) which Debt
shall constitute Pledged Debt and (y) any promissory notes
evidencing such Pledged Debt shall be pledged as security for the
Obligations of the holder thereof under the Loan Documents to
which such holder is a party and delivered to the Collateral
Trustee pursuant to the terms of the Security Agreement,
(vii) Debt owing by any Foreign Subsidiary to (or
Contingent Obligations made in respect of the obligations of any
Foreign Subsidiary by) any U.S. Credit Party, not to exceed in the
aggregate $10,000,000 at any time outstanding under this clause
(vii), which Debt, in the case of any Foreign Credit Party, (x)
shall constitute Pledged Debt and (y) any promissory notes
relating to such Debt (which shall be prepared in certificated
form if determined in the reasonable judgment of the Debt
Coordinators to be necessary or advisable under applicable law to
vest in the Collateral Trustee a valid and subsisting Lien on such
Debt) shall be pledged as security for the Obligations of the
holder thereof under the Loan Documents to which such holder is a
party and delivered to the Collateral Trustee pursuant to the
terms of the Collateral Documents;
(viii) Debt owing by any U.S. Credit Party or any Foreign
Subsidiary to (or Contingent Obligations made in respect of the
obligations of any U.S. Credit Party or any Foreign Subsidiary by)
any Excluded Foreign Subsidiary;
(ix) Debt owing by any Foreign Credit Party to (or
Contingent Obligations made in respect of the obligations of any
Foreign Credit Party by) another Foreign Credit Party, provided
that (A) no such Debt can be incurred after the occurrence and
during the continuance of a Default, (B) such Debt is otherwise in
compliance with Schedule III hereto, (C) such Debt shall
constitute Pledged Debt and (D) any promissory notes relating to
such Debt (which shall be prepared in certificated form if
determined in the reasonable judgment of the Debt Coordinators to
be necessary or advisable under applicable law to vest in the
Collateral Trustee a valid and subsisting Lien on such Debt) shall
be pledged as security for the Obligations of the holder thereof
under the Loan Documents to which such holder is a party and
delivered to the Collateral Trustee pursuant to the terms of the
Collateral Documents;
(x) Debt owing by any Excluded Foreign Subsidiary to (or
Contingent Obligations made in respect of the obligations of any
Excluded Foreign Subsidiary by) any Foreign Credit Party, not to
exceed in the aggregate $10,000,000 at any time outstanding under
this clause (x) and (A) which Debt shall constitute Pledged Debt
and (B) any promissory notes relating to such Debt (which shall be
prepared in certificated form if determined in the reasonable
judgment of the Debt Coordinators to be necessary or advisable
under applicable law to vest in the Collateral Trustee a valid and
subsisting Lien on such Debt) shall be pledged as security for the
Obligations of the holder thereof under the Loan Documents to
which such holder is a party and delivered to the Collateral
Trustee pursuant to the terms of the Collateral Documents;
(xi) Debt consisting of Contingent Obligations pursuant
to which a U.S. Credit Party guarantees operating lease
obligations of Foreign Subsidiaries, not to exceed in the
aggregate $5,000,000 during any Fiscal Year;
(xii) Debt of any Person that becomes a Subsidiary of
Group after the date hereof in accordance with the terms of
Section 2.6(e)(x) which Debt is existing at the time such Person
becomes a Subsidiary of Group (other than Debt incurred solely in
contemplation of such Person becoming a Subsidiary of Group);
provided that after giving effect to such Debt, the Leverage
Ratio, calculated on a pro-forma basis (and using for this purpose
"Total Bank Outstandings" rather than "Indebtedness for Borrowed
Money" in such calculation) as if such Debt had been incurred
immediately prior to the beginning of the most recent period of
four consecutive Fiscal Quarters for which financial statements
have been delivered hereunder, will not have increased;
(xiii) Debt in respect of the Securitization Facility;
(xiv) Debt existing on the date hereof and described on
Schedule 2.6(b), and any Debt extending the maturity of, or
refunding or refinancing, in whole or in part, such Debt (which,
in the case of Debt consisting of guarantees of operating lease
obligations, shall include guarantees of any replacement leases,
provided that the Contingent Obligation under such guarantees may
not increase as a result thereof), provided that the (A) terms of
any such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Loan Documents, (B)
principal amount of such Debt shall not be increased above the
principal amount thereof outstanding immediately prior to such
extension, refunding or refinancing, and the direct and contingent
obligors therefor shall not be changed as a result of or in
connection with such extension, refunding or refinancing and (C)
terms relating to principal amount, amortization, maturity,
collateral (if any), subordination (if any), and other material
terms taken as a whole, of any such extending, refunding or
refinancing Debt, and of any agreement entered into and of any
instrument issued in connection therewith, are no less favorable
in any material respect to the Loan Parties or the Lender Parties
than the terms of any agreement or instrument governing the Debt
being extended, refunded or refinanced and the interest rate
applicable to any such extending, refunding or refinancing Debt
does not exceed the then applicable market interest rate; and
(xv) Specified Debt.
(c) Mergers, Etc. Group will not merge into or
consolidate with any Person or permit any Person to merge into it, or
permit any of its Subsidiaries to do so, except that:
(i) any Subsidiary of Group may merge into or consolidate
with Group or any Domestic Subsidiary, provided that, in the case
of any such merger or consolidation, the Person formed by such
merger or consolidation shall be a U.S. Credit Party;
(ii) any Excluded Foreign Subsidiary may merge into or
consolidate with any Foreign Subsidiary, provided that, in the
case of any such merger or consolidation, the Person formed by
such merger or consolidation shall be a Wholly-Owned Subsidiary of
Group;
(iii) any Foreign Credit Party may merge into or
consolidate with any other Foreign Credit Party, provided that (A)
the Person formed by such merger or consolidation shall be a
Foreign Credit Party and (B) such merger or consolidation is
otherwise in compliance with Schedule III hereto;
(iv) in connection with any acquisition permitted under
Section 2.6(e), any (A) Subsidiary of Group may merge into or
consolidate with any other Person or permit any other Person to
merge into or consolidate with it if the Person surviving such
merger shall be a U.S. Credit Party, (B) Excluded Foreign
Subsidiary may merge into or consolidate with any other Person or
permit any other Person to merge into or consolidate with it if
the Person surviving such merger shall be a Wholly-Owned
Subsidiary of Group and (C) Foreign Credit Party may merge into or
consolidate with other Person or permit any other Person to merge
into or consolidate with it if (1) the Person surviving such
merger shall be a Foreign Credit Party and (2) such merger or
consolidation is otherwise in compliance with Schedule III hereto;
and
(v) in connection with any sale or other disposition
permitted under Section 2.6(d) (other than clause (ii) thereof),
any Subsidiary of Group may merge into or consolidate with any
other Person or permit any other Person to merge into or
consolidate with it;
provided, however, that in each case under this clause (c), both before and
immediately after giving effect thereto, no event shall occur and be
continuing that constitutes a Default.
(d) Sales, Etc., of Assets. Group will not sell, lease,
transfer or otherwise dispose of, or permit any of its Subsidiaries to
sell, lease, transfer or otherwise dispose of, any assets, or grant any
option or other right to purchase, lease or otherwise acquire any assets,
except:
(i) sales of Inventory in the ordinary course of its
business;
(ii) in a transaction permitted by Section 2.6(c) (other
than clause (v) thereof);
(iii) sales of assets set forth on Schedule 2.6(d)(iii)
so long as (A) the purchase price paid to Group or any of its
Subsidiaries for such asset shall be no less than the fair market
value of such asset at the time of such sale and (B) no less than
85% of the purchase price for such asset shall be paid to Group or
such Subsidiary in cash, and the Collateral Trustee (on behalf of
the Secured Parties) shall receive a first priority perfected
security interest in all consideration which is not in the form of
cash (unless such consideration is not owned by a Credit Party);
(iv) the sale of any asset or assets by Group or any of
its Subsidiaries so long as (A) the purchase price paid to Group
or such Subsidiary for such asset shall be no less than the fair
market value of such asset at the time of such sale, (B) no less
than 85% of the purchase price for such asset shall be paid to
Group or such Subsidiary in cash, and the Collateral Trustee (on
behalf of the Secured Parties) shall receive a first priority
perfected security interest in all consideration which is not in
the form of cash (unless such consideration is not owned by a
Credit Party), (C) after giving effect to any such sale, the
Leverage Ratio, calculated on a pro-forma basis (and using for
this purpose "Total Bank Outstandings" rather than "Indebtedness
for Borrowed Money" in such calculation) as if such sale had
occurred immediately prior to the first day of the most recent
period of four consecutive Fiscal Quarters for which financial
statements have been delivered to the Lender Parties pursuant to
Section 2.8 or 4.1, will not have increased, (D) after giving
effect to such sale and any associated repayment of debt, Group
shall be in pro forma compliance with the covenants contained in
Section 2.7(a) and (b), calculated based on the financial
statements most recently delivered to the Lender Parties pursuant
to Section 2.8 or 4.1 and as though such sale had occurred at the
beginning of the four-quarter period covered thereby, (E) such
sale does not require consent under applicable corporate law, (F)
the Net Cash Proceeds thereof are applied to the prepayment of the
Covered Facilities in accordance with Section 2.9, (G) neither the
seller of such assets nor any of its Affiliates shall have any
subsequent payment obligations in respect of such sale, other than
customary and standard indemnity obligations and (H) the aggregate
purchase price paid to Group and all of its Subsidiaries for all
assets sold pursuant to this clause (iv) shall not exceed
$25,000,000 in the aggregate;
(v) so long as no Default shall occur and be continuing,
the grant of any option or other right to purchase any asset in a
transaction that would be permitted under the provisions of this
Section 2.6(d);
(vi) transfers of assets from (A) any Foreign Subsidiary
or any U.S. Credit Party to any U.S. Credit Party, (B) any
Excluded Foreign Subsidiary to any Foreign Subsidiary, (C) any
U.S. Credit Party to any Foreign Subsidiary, provided that the
aggregate fair market value of assets sold, leased, transferred or
otherwise disposed of to Foreign Subsidiaries by U.S. Credit
Parties shall not exceed $25,000,000 in the aggregate, and
provided further that no Excluded Intellectual Property may at any
time be transferred to a Foreign Subsidiary, (D) any Foreign
Credit Party to any Excluded Foreign Subsidiary, provided that the
aggregate fair market value of assets sold, leased, transferred or
otherwise disposed of to Excluded Foreign Subsidiaries by Foreign
Credit Parties shall not exceed $5,000,000 in the aggregate and
(E) any Foreign Credit Party to another Foreign Credit Party,
provided that such sale is otherwise in compliance with Schedule
III hereto;
(vii) the sale or discount of accounts (A) in an
aggregate amount not exceeding $10,000,000 in face amount per
Fiscal Year or (B) that are past due by more than 90 days,
provided that the sale or discount of such accounts is in the
ordinary course of Group's business and consistent with prudent
business practices;
(viii) the licensing of trademarks and trade names by
Group or any of its Subsidiaries in the ordinary course of its
business, provided that such licensing takes place on an
arm's-length basis in the ordinary course of business consistent
with prior practice;
(ix) the rental by Group and its Subsidiaries, as lessors
or sub-lessors, in the ordinary course of their respective
businesses, on an arm's-length basis, of real property and
personal property, in each case under leases (other than
Capitalized Leases);
(x) the sale or disposition of machinery and equipment no
longer used or useful in the business of the Warnaco Entities;
(xi) sales of accounts receivable and related property
under the Securitization Facility; and
(xii) sales of equipment in connection with a Specified
Sale-Leaseback Transaction in an aggregate amount not exceeding
$40,000,000 in each Fiscal Year;
provided that in the case of sales of assets pursuant to clause (iii),
(iv), (vii), (viii), (ix) and (x) above, Group shall, on the date of
receipt by it or any of its Subsidiaries of the Net Cash Proceeds from such
sale, pay such Net Cash Proceeds to the Administrative Agent pursuant to
Section 2.9 hereof for allocation as specified in Section 2.1 of the
Intercreditor Agreement.
(e) Investments in Other Persons. Group will not make or
hold, or permit any of its Subsidiaries to make or hold, any Investment in
any Person, except:
(i) Investments by (A) Group and its Subsidiaries in
their Subsidiaries outstanding on the date hereof and additional
investments by (A) Group or any of its Subsidiaries in U.S. Credit
Parties, (B) Excluded Foreign Subsidiaries in any Subsidiaries of
Group, (C) U.S. Credit Parties in Foreign Subsidiaries in an
aggregate amount invested from the date hereof under this clause
(C) not to exceed $5,000,000, (D) Foreign Credit Parties in
Excluded Foreign Subsidiaries in an aggregate amount invested from
the date hereof under this clause (D) not to exceed $5,000,000,
(E) U.S. Credit Parties in Foreign Subsidiaries, such Investments
to be used solely to permit such Foreign Subsidiaries to comply
with statutory capital requirements under applicable local law, in
an aggregate amount invested from the date hereof under this
clause (E) not to exceed $15,000,000; provided further that no
more than an aggregate of $5,000,000 invested from the date hereof
under this clause (E) may be invested in Excluded Foreign
Subsidiaries and (F) Foreign Credit Parties in other Foreign
Credit Parties, provided that such investment is otherwise in
compliance with Schedule III hereto;
(ii) Investments by Group and its Subsidiaries in Cash
Equivalents;
(iii) Investments existing on the date hereof and
described on Schedule 4.1(w) hereto;
(iv) Investments in joint ventures in an aggregate amount
not to exceed $5,000,000;
(v) Investments consisting of Equity Interests,
obligations, securities or other property received in a bankruptcy
proceeding or in settlement of claims arising in the ordinary
course of business;
(vi) (A) advances or loans to directors or employees of
Group that do not exceed $1,000,000 in the aggregate at any one
time outstanding and (B) advances for employee travel, relocation
and other similar and customary expenses incurred in the ordinary
course of business;
(vii) notes received pursuant to an asset sale permitted
by Section 2.6(d)(iv);
(viii) Investments consisting of intercompany Debt and
Contingent Obligations permitted under Sections 2.6(b)(vi), (vii),
(viii), (ix), (x) and (xi);
(ix) Investments by Group to the extent the consideration
paid by Group consists of Group common stock; and
(x) other Investments in an aggregate amount invested not
to exceed $5,000,000 for the period from the Effective Date
through December 31, 2001, and $10,000,000 for the period from the
Effective Date through the Debt Termination Date; provided that
with respect to Investments made under this clause (x): (A) any
newly acquired or organized Subsidiary of Group shall be a
Wholly-Owned Subsidiary of Warnaco, (B) immediately before and
after giving effect thereto, no Default shall have occurred and be
continuing or would result therefrom, (C) the business conducted
by any company or business acquired or invested in pursuant to
this clause (ix) shall be a line of business permitted under
Section 2.6(o), (D) immediately after giving effect to the
acquisition of a company or business pursuant to this clause (x),
Group shall be in pro forma compliance with the covenants
contained in Section 2.7, calculated based on the financial
statements most recently delivered to the Lender Parties pursuant
to Section 2.8 or 4.1 and as though such acquisition had occurred
at the beginning of the four-quarter period covered thereby, as
evidenced by a certificate of a Responsible Financial Officer of
Group delivered to the Lender Parties demonstrating such
compliance and (E) additional Investments consisting of
contractual "earn-outs" or purchase price or similar adjustments
specified on Schedule 2.6(e) and made after the Effective Date
shall be permitted without giving effect to the $5,000,000 and
$10,000,000 amount limits specified above.
(f) Restricted Payments. Group will not declare or pay
any dividends, purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Interests now or hereafter outstanding, return any
capital to its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or the
equivalent Persons thereof) as such or issue or sell any Equity Interests
(other than Designated Capital Market Transactions, and, except with
respect to issuances or sales of Equity Interests to satisfy obligations
under the Equity Derivatives, common stock) or accept any capital
contributions, or permit any of its Subsidiaries to do any of the
foregoing, or permit any of its Subsidiaries to purchase, redeem, retire,
defease or otherwise acquire for value any Equity Interests in Group or to
issue or sell any Equity Interests therein, except that, so long as no
Default shall have occurred and be continuing at the time of any action
described in clause (i) or (ii) below or would result therefrom:
(i) Group may (A) declare and pay dividends and
distributions payable only in common stock of Group, (B) except to
the extent the Net Cash Proceeds thereof are required to be paid
to the Administrative Agent pursuant to Section 2.9, purchase,
redeem, retire, defease or otherwise acquire shares of its capital
stock with the proceeds received contemporaneously from the issue
of new shares of its capital stock with equal or inferior voting
powers, designations, preferences and rights and (C) declare and
pay cash dividends to its stockholders on or about October 5, 2000
in an amount equal to or less than $5,000,000;
(ii) (A) any Subsidiary of Group may declare and pay
dividends to any U.S. Credit Party, (B) any Excluded Foreign
Subsidiary may declare and pay dividends to any Foreign
Subsidiary, (C) any Foreign Credit Party may declare and pay
dividends to another Foreign Credit Party, provided that it is
reasonably determined by the Debt Coordinators that the rights and
remedies of the Administrative Agent, the Debt Coordinators and
the Collateral Trustee under the applicable Collateral Documents
shall not be materially adversely affected thereby and (D) Group
may declare and pay dividends pursuant to an equity Designated
Capital Markets Transaction;
(iii) Group may satisfy its obligations under the Equity
Derivatives in accordance with the terms thereof, other than
through the issuance or sale of Equity Interests; and
(iv) the Trust Stock may be converted into common stock
of Designer Holdings Ltd. in accordance with the TOPRs Documents.
(g) Amendments of Constitutive Documents. Group will not
amend, or permit any of its Subsidiaries to amend, its certificate of
incorporation or bylaws or other constitutive documents in any manner that
could adversely affect the rights of the Administrative Agent, the Debt
Coordinators, the Collateral Trustee or any Lender Party under the Loan
Documents or any Covered Facility.
(h) Accounting Changes. Group will not make or permit, or
permit any of its Subsidiaries to make or permit, any change in (i)
accounting policies or reporting practices, except as required or permitted
by GAAP or the Financial Accounting Standards Board, or (ii) Fiscal Year.
(i) Prepayments, Etc., of Debt. Group will not prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled
maturity thereof in any manner, or make any payment in violation of any
subordination terms of, any Debt, except the prepayment of the Covered
Facilities in accordance with the terms of this Agreement and Debt
permitted under Section 2.6(b)(vi), (vii), (viii), (ix), (x) and (xi).
(j) Negative Pledge. Group will not enter into or suffer
to exist, or permit any of its Subsidiaries to enter into or suffer to
exist, any agreement prohibiting or conditioning the creation or assumption
of any Lien upon any of its property or assets except (i) in favor of the
Secured Parties, (ii) as provided in any other agreement as existing on the
Effective Date, (iii) any Capitalized Lease permitted by Section 2.6(b)(iv)
solely to the extent that such Capitalized Lease prohibits a Lien on the
property subject thereto, (iv) as to any asset that is subject to a
contract of sale permitted by Section 2.6(d), (v) restrictions under the
Securitization Facility, (vi) restrictions consisting of customary
non-assignment provisions that are entered into in the ordinary course of
business consistent with prior practice to the extent that such provisions
restrict the transfer or assignment of such contract, and (vii)
restrictions under any purchase money financing permitted by Section
2.6(b)(iii) solely to the extent that such purchase money financing
prohibits a Lien on the property subject thereto.
(k) Partnerships, Etc. Group will not become a general
partner in any general or limited partnership or permit any of its
Subsidiaries to do so.
(l) Speculative Transactions. Group will not engage, or
permit any of its Subsidiaries to engage, in any transaction involving
commodity options, futures contracts, speculative Hedge Agreements or any
similar speculative transactions.
(m) Capital Expenditures. Group will not make, or permit
any of its Subsidiaries to make, any Capital Expenditures that would cause
the aggregate of all such Capital Expenditures made by Group and its
Subsidiaries in any period set forth below to exceed the amount set forth
below for such period:
-------------------------- --------------------
YEAR ENDING IN AMOUNT
-------------------------- --------------------
2000 $80,000,000
-------------------------- --------------------
2001 $70,000,000
-------------------------- --------------------
2002 $70,000,000
-------------------------- --------------------
2003 $70,000,000
-------------------------- --------------------
2004 $70,000,000
-------------------------- --------------------
provided however that if for any Fiscal Year set forth above, the amount
specified above for such Fiscal Year exceeds the aggregate amount of
Capital Expenditures made by Group and its Subsidiaries during such Fiscal
Year (the amount of such excess being the "Excess Amount"), Group and its
Subsidiaries shall be entitled to make additional Capital Expenditures in
the immediately succeeding Fiscal Year in an amount equal to 50% of the
Excess Amount.
(n) Payment Restrictions Affecting Subsidiaries. Group
will not directly or indirectly, enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare or
pay dividends or other distributions in respect of its Equity Interests or
repay or prepay any Debt owed to, make loans or advances to, or otherwise
transfer assets to or invest in, Group or any of its Subsidiaries (whether
through a covenant restricting dividends, loans, asset transfers or
investments, a financial covenant or otherwise), except (i) the Loan
Documents and the Covered Facilities, (ii) restrictions in existence on the
Effective Date, (iii) contractual restrictions consisting of customary
non-assignment provisions that are entered into in the ordinary course of
business consistent with prior practice to the extent that such provisions
restrict the transfer of such contract, (iv) any Capitalized Lease
permitted by Section 2.6(b)(iv) solely to the extent that the transfer of
the property that is subject to such Capitalized Lease is prohibited, (v)
restrictions under any purchase money financing permitted by Section
2.6(b)(iii) solely to the extent that the transfer of the property that is
subject to such financing is prohibited, (vi) restrictions on the transfer
of any asset that is subject to a contract of sale permitted by Section
2.6(d) and (vii) restrictions on transfer and dividends in the
Securitization Facility.
(o) Change in Nature of Business. Group will not make, or
permit any of its Subsidiaries to make, any material change in the nature
of its business as carried on at the Effective Date.
SECTION 2.7. Financial Covenants. Until the Debt
Termination Date, Group will, on a Consolidated basis:
(a) Leverage Ratio. Maintain at the end of each Fiscal
Quarter, as tested on the date that Group's Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as applicable, is required to be delivered
to the SEC, a Leverage Ratio not more than the ratio set forth below for
each period set forth below:
---------------------------------------------------------
QUARTER ENDING RATIO
---------------------------------------------------------
December 31, 2000 5.30
---------------------------------------------------------
March 31, 2001 5.80
---------------------------------------------------------
June 30, 2001 5.35
---------------------------------------------------------
September 30, 2001 5.35
---------------------------------------------------------
December 31, 2001 4.25
---------------------------------------------------------
March 31, 2002 4.25
---------------------------------------------------------
June 30, 2002 4.25
---------------------------------------------------------
September 30, 2002 4.25
---------------------------------------------------------
December 31, 2002 3.50
---------------------------------------------------------
March 31, 2003 3.50
---------------------------------------------------------
June 30, 2003 3.50
---------------------------------------------------------
September 30, 2003 3.50
---------------------------------------------------------
December 31, 2003 3.00
---------------------------------------------------------
March 31, 2004 3.00
---------------------------------------------------------
June 30, 2004 3.00
---------------------------------------------------------
September 30, 2004 3.00
---------------------------------------------------------
December 31, 2004 3.00
---------------------------------------------------------
(b) Fixed Charge Coverage Ratio. Maintain at the end of
each Fiscal Quarter, as tested on the date that Group's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as applicable, is required to
be delivered to the SEC, a Fixed Charge Coverage Ratio not less than the
ratio set forth below for each period set forth below:
---------------------------------------------------------
QUARTER ENDING RATIO
---------------------------------------------------------
December 31, 2000 1.05
---------------------------------------------------------
March 31, 2001 1.05
---------------------------------------------------------
June 30, 2001 1.05
---------------------------------------------------------
September 30, 2001 1.10
---------------------------------------------------------
December 31, 2001 1.10
---------------------------------------------------------
March 31, 2002 1.10
---------------------------------------------------------
June 30, 2002 1.10
---------------------------------------------------------
September 30, 2002 1.20
---------------------------------------------------------
December 31, 2002 1.20
---------------------------------------------------------
March 31, 2003 1.30
---------------------------------------------------------
June 30, 2003 1.30
---------------------------------------------------------
September 30, 2003 1.30
---------------------------------------------------------
December 31, 2003 1.30
---------------------------------------------------------
March 31, 2004 1.40
---------------------------------------------------------
June 30, 2004 1.40
---------------------------------------------------------
September 30, 2004 1.40
---------------------------------------------------------
December 31, 2004 1.40
---------------------------------------------------------
(c) Net Worth. Maintain at the end of each Fiscal
Quarter, as tested on the date that Group's Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as applicable, is required to be delivered
to the SEC, an excess of Consolidated total assets over Consolidated total
liabilities, of not less than an amount equal to (i) $384,000,000 plus (ii)
50% of an amount (but not less than zero) equal to (a) the aggregate net
income of Group computed on a Consolidated cumulative basis since the first
day of the last Fiscal Quarter in 2000 less (b) the aggregate amount of
cash dividends paid by Group computed on a cumulative basis since the
Effective Date less (c) the aggregate amount paid by Group or any of its
Subsidiaries in settlement of the Equity Derivatives in the third Fiscal
Quarter of 2002 plus, without duplication, (d) any reduction in net income
relating to the Equity Derivatives resulting from any change in GAAP
enacted prior to the Effective Date.
(d) Limitation on Debt. Not permit the Total Bank
Outstandings as of the last Business Day of each Fiscal Year set forth
below to exceed the corresponding amount for such year as set forth below;
and in each case Group will certify the foregoing within 10 Business Days
after each such date to the Administrative Agent in a certificate with
supporting calculations in reasonable detail by a Responsible Financial
Officer of Group in each case prepared, to the best knowledge of such
officer, in accordance with GAAP:
---------------------- ---------------------------
FISCAL YEAR AMOUNT
---------------------- ---------------------------
2000 $2,035,000,000
---------------------- ---------------------------
2001 $1,950,000,000
---------------------- ---------------------------
2002 $1,900,000,000
---------------------- ---------------------------
2003 $1,800,000,000
---------------------- ---------------------------
2004 $1,700,000,000
---------------------- ---------------------------
SECTION 2.8. Reporting Requirements. Until the Debt
Termination Date, Group will furnish to the Administrative Agent and the
Lender Parties:
(a) as soon as available and in any event within 50 days
after the end of each of the first three Fiscal Quarters of each Fiscal
Year, Consolidated balance sheets of Group and its Subsidiaries as of the
end of such Fiscal Quarter and Consolidated statements of income and
Consolidated statements of cash flows of Group and its Subsidiaries for the
period commencing at the end of the previous Fiscal Year and ending with
the end of such Fiscal Quarter, and also setting forth a variance analysis
of monthly results during such Fiscal Quarter as compared to monthly
budgeted amounts specified in the forecast for such Fiscal Quarter
previously delivered pursuant to clause (h) below (or, with respect to such
financial statements for the Fiscal Quarter ended December 30, 2000,
compared to the monthly financial statements delivered to the Lender
Parties pursuant to Section 6.1(a)(xiv)), duly certified (subject to
year-end audit adjustments) by a Responsible Financial Officer of Group as
having been prepared in accordance with GAAP and certifying compliance with
the terms of this Agreement and setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 2.7;
(b) as soon as available and in any event within 95 days
after the end of each Fiscal Year of Group, a copy of the annual audit
report for such year for Group and its Subsidiaries, containing
Consolidated balance sheet of Group and its Subsidiaries as of the end of
such Fiscal Year and Consolidated statements of income and cash flows of
Group and its Subsidiaries for such Fiscal Year, in each case accompanied
by an opinion of any Approved Accounting Firm or by other independent
public accountants acceptable to the Debt Coordinators without any going
concern or similar qualification, and a certificate of a Responsible
Financial Officer of Group as to compliance with the terms of this
Agreement and setting forth in reasonable detail the calculations necessary
to demonstrate compliance with Section 2.7;
(c) as soon as available and in any event within 30 days
after the end of each month, Consolidated balance sheets of Group and its
Subsidiaries as of the end of such month and Consolidated statements of
income of Group and its Subsidiaries for the period commencing at the end
of the previous month and ending with the end of such month, duly certified
(subject to year-end audit adjustments) by a Responsible Financial Officer
of Group as having been prepared in accordance with GAAP;
(d) as soon as possible and in any event within two
Business Days after the occurrence of each Default continuing on the date
of such statement, a statement of a Responsible Financial Officer of Group
setting forth details of such Default and the action that the Loan Parties
have taken and propose to take with respect thereto;
(e) promptly after the sending or filing thereof, copies
of all reports that the Loan Parties send to any of their security holders
generally, and copies of all reports and registration statements that Group
or any Subsidiary files with the Securities and Exchange Commission or any
national securities exchange;
(f) promptly after the commencement thereof, notice of
all actions and proceedings before any court, governmental agency or
arbitrator affecting the Loan Parties or any of their Subsidiaries of the
type described in Section 4.1(f);
(g) within one Business Day after receipt thereof by any
Loan Party, copies of each notice from S&P or ▇▇▇▇▇'▇ indicating any change
in the Debt Rating;
(h) as soon as available and in any event no later than
45 days after the end of each Fiscal Year, (A) forecasts of balance sheets,
income statements and cash flow statements on a monthly basis for the
Fiscal Year then beginning and (B) an annual business plan for the next
succeeding Fiscal Year and forecast on an annual basis for each Fiscal Year
thereafter for the balance of the term of the Covered Facilities; in each
case prepared by management of Group and satisfactory in form to the Debt
Coordinators;
(i) concurrently with any delivery of financial
statements under clause (a) or (b) above, a certificate of a Responsible
Financial Officer of Group specifying which Foreign Subsidiaries, if any,
that were not previously Credit Parties prior to the most recently ended
Fiscal Quarter, are to be classified, as of the end of such Fiscal Quarter,
as Included Foreign Subsidiaries;
(j) promptly after the assertion or occurrence thereof,
notice of any Environmental Action against or of any noncompliance by Group
or any of its Subsidiaries with any Environmental Law or Environmental
Permit that would reasonably be expected to (i) have a Material Adverse
Effect or (ii) cause any Material Real Property or Material Leased Property
to be subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law;
(k) as soon as available and in any event within 50 days
after the end of the third Fiscal Quarter of 2000, monthly forecasts for
the fourth Fiscal Quarter of 2000 and an annual business plan for the next
succeeding four Fiscal Years; in each case prepared by management of Group
and satisfactory in form to the Debt Coordinators; and
(l) such other information respecting the Loan Parties or
any of their Subsidiaries as any Loan Party through the Debt Coordinators
may from time to time reasonably require.
SECTION 2.9. Mandatory Payments. (a) Group shall, on the
date of receipt of the Net Cash Proceeds by any Loan Party or any of its
Subsidiaries from (A) the sale, lease, transfer or other disposition of any
assets of any Loan Party or any of its Subsidiaries (other than (1) any
sale, lease, transfer or other disposition of assets pursuant to clause
(i), (ii), (v), (vi), (xi) or (xii) of Section 2.6(d) and (2) Net Cash
Proceeds from the sale, lease, transfer or other disposition of assets
under any other clause of Section 2.6(d) in an amount of up to $10,000,000
in the aggregate), (B) the incurrence or issuance by any Loan Party or any
of its Subsidiaries of any Debt incurred or issued under or in connection
with any New Facility (other than the New Trade Credit Facility) and any
Designated Capital Markets Transaction, (C) the sale or issuance by any
Loan Party or any of its Subsidiaries of any Equity Interests (including,
without limitation, receipt of any capital contribution) and (D) any
Extraordinary Receipt received by or paid to or for the account of any Loan
Party or any of its Subsidiaries and not otherwise included in clause (A),
(B) or (C) above, pay an amount equal to the amount of such Net Cash
Proceeds to the Administrative Agent; provided that with respect to clause
(C) above, during the period after all Obligations of the Loan Parties
under the Bridge Facility shall have been repaid in full, Group shall be
required to pay to the Administrative Agent 50% of the Net Cash Proceeds
received by any Loan Party or any of its Subsidiaries from the sale or
issuance by any Loan Party or any of its Subsidiaries of any Equity
Interests (including, without limitation, receipt of any capital
contribution).
(b) All such payments made to the Administrative Agent
pursuant to this Section 2.9 shall be (i) applied by the Administrative
Agent as specified in Section 2.1 of the Intercreditor Agreement and (ii)
made together with accrued interest to the date of such payment on the
principal amount prepaid.
(c) Notwithstanding anything to the contrary contained in
paragraph (a) of this Section 2.9 or in Section 2.6(d), so long as no
Default shall have occurred and be continuing, if, on any date on which a
payment to the Administrative Agent would otherwise be required pursuant to
this Section 2.9 or Section 2.6(d), the aggregate amount of Net Cash
Proceeds or other amounts otherwise required by such Sections to be paid to
the Administrative Agent on such date are less than or equal to $5,000,000,
Group may defer such prepayment until the date on which the aggregate
amount of Net Cash Proceeds or other amounts otherwise required by such
Sections to be paid to the Administrative Agent exceeds $5,000,000,
provided that during such deferral period such amounts, to the extent
originally constituting Net Cash Proceeds, shall otherwise be deemed to
retain their original character as Net Cash Proceeds for application as
required by this Section 2.9. Upon the occurrence of a Default, Group shall
immediately pay to the Administrative Agent the amount of all Net Cash
Proceeds received by any Loan Party or any of its Subsidiaries and other
amounts, as applicable, that are required to be paid to the Administrative
Agent by this Section 2.9 (without giving effect to the first and second
sentences of this paragraph (c)) but which have not previously been so
paid.
SECTION 2.10. Release of Collateral. Upon the sale,
transfer or other disposition of any item of Collateral (including 100% of
the capital stock of a Subsidiary) of any Loan Party to any third party
which is not an Affiliate in accordance with the terms of the Loan
Documents, and the payment by Group of the Net Cash Proceeds thereof to the
Administrative Agent in accordance with the provisions of Section 2.9
hereof (if applicable), the Collateral Trustee will, at Group's expense,
execute and deliver to such Loan Party such documents as such Loan Party
may reasonably request (without representation or warranty) to evidence the
release of such (i) Subsidiary from the Loan Documents to which it is a
party and (ii) item of Collateral from the assignment and security interest
granted under the Collateral Documents in accordance with the terms of the
Loan Documents.
SECTION 2.11. Increased Costs, Etc. (a) If, due to either
(i) the introduction of or any change in or in the interpretation of any
law or regulation or (ii) the compliance with any guideline or request from
any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender Party
of agreeing to make or of making, funding or maintaining eurodollar rate
credit extensions under any Covered Facility or of agreeing to issue or of
issuing or maintaining or participating in letters of credit or bankers'
acceptances or other credit extensions (excluding, for purposes of this
Section 2.11, any such increased costs resulting from (x) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis
of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender Party is organized or has its applicable lending office or any
political subdivision thereof), then Group shall from time to time, upon
demand by such Lender Party (with a copy of such demand to the Debt
Coordinators), pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party
for such increased cost; provided, however, that before making any such
demand, a Lender Party claiming additional amounts under this Section
2.11(a) agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different
applicable lending office if the making of such a designation would avoid
the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A certificate as
to the amount of such increased cost, submitted to Group by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest
error.
(b) If any Lender Party determines that compliance with
any law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to be
maintained by such Lender Party or any corporation controlling such Lender
Party and that the amount of such capital is increased by or based upon the
existence of such Lender Party's commitment to lend or provide other credit
extensions under the Covered Facilities (or similar contingent
obligations), then, upon demand by such Lender Party or such corporation
(with a copy of such demand to the Debt Coordinators), Group shall pay to
the Administrative Agent for the account of such Lender Party, from time to
time as specified by such Lender Party, additional amounts sufficient to
compensate such Lender Party in the light of such circumstances, to the
extent that such Lender Party reasonably determines such increase in
capital to be allocable to the existence of such Lender Party's commitment
to provide credit extensions under the Covered Facilities. A certificate as
to such amounts submitted to Group by such Lender Party shall be conclusive
and binding for all purposes, absent manifest error.
(c) If, with respect to any eurodollar rate credit
extensions under the Covered Facilities, the Required Lenders notify the
Debt Coordinators that the eurodollar rate for any applicable interest
period for any credit extensions under any Covered Facility will not
adequately reflect the cost to such Lender Parties of making, funding or
maintaining their eurodollar rate credit extensions for such interest
period, the Debt Coordinators shall forthwith so notify Group and the
Lender Parties, whereupon (i) each such eurodollar rate credit extension
under the Covered Facilities will automatically, on the last day of the
then existing interest period therefor, convert into a base rate credit
extension and (ii) the obligation of the Lender Parties to make, or to
convert credit extensions under the Covered Facilities into, eurodollar
rate credits shall be suspended until the Debt Coordinators shall notify
Group that the Required Lenders have determined that the circumstances
causing such suspension no longer exist; provided, that any Covered
Facility that does not by its terms provided for base rate loans shall be
deemed in the circumstances described in this clause (c) to provided for
interest at the "Base Rate" (as defined in the Bridge Facility).
(d) Notwithstanding any other provision of this
Agreement, any other Loan Document or any Covered Facility, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any Lender
Party or its eurodollar rate lending office to perform its obligations
under any Covered Facility to make eurodollar rate credit extensions or to
continue to fund or maintain eurodollar rate credit extensions under the
Covered Facilities, then, on notice thereof and demand therefor by such
Lender Party to Group through the Debt Coordinators, (i) each eurodollar
rate credit extension, and each commitment by such Lender Party to make
eurodollar rate credit extensions, under the Covered Facilities will
automatically, upon such demand, convert into a base rate credit extension
or commitment and (ii) the obligation of the Lender Parties to make, or
maintain or to convert credit extensions into, eurodollar rate credit
extensions under the Covered Facilities shall be suspended until the Debt
Coordinators shall notify Group that such Lender Party has determined that
the circumstances causing such suspension no longer exist, provided,
however, that, before making any such demand, such Lender Party agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different eurodollar lending office
if the making of such a designation would allow such Lender Party or its
eurodollar lending office to continue to perform its obligations to make
eurodollar rate credit extensions or to continue to fund or maintain
eurodollar rate credit extensions and would not, in the judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
SECTION 2.12. Taxes. (a) Any and all payments by the Loan
Parties under the Loan Documents and under the Covered Facilities, and by
any Lender Party to any other Lender Party under the Loan Documents, shall
be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender
Party and each Agent, taxes that are imposed on its overall net income by
the United States and taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction under the laws of which such Lender Party or such Agent, as
the case may be, is organized or any political subdivision thereof and, in
the case of each Lender Party, taxes that are imposed on its overall net
income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction of such Lender Party's applicable lending office or
any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities in respect of
payments under the Loan Documents or under the Covered Facilities being
hereinafter referred to as "Taxes"). If any Loan Party or Lender Party
shall be required by law to deduct any Taxes from or in respect of any sum
payable under any Loan Documents or under any Covered Facility to any
Lender Party or any Agent, (i) the sum payable by such Loan Party or Lender
Party shall be increased as may be necessary so that after the Loan Party
or Lender Party, as applicable, and the Debt Coordinators have made all
required deductions (including deductions applicable to additional sums
payable under this Section 2.12) such Lender Party or such Agent, as the
case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Loan Party or Lender Party making
such payment shall make all such deductions and (iii) Group shall pay the
full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any present
or future stamp, documentary, excise, property or similar taxes, charges or
levies that arise from any payment made by any Loan Party under the Loan
Documents or under the Covered Facilities, or by any Lender Party under the
Loan Documents, or from the execution, delivery or registration of,
performance under, or otherwise with respect to, any of the Loan Documents
or Covered Facilities (hereinafter referred to as "Other Taxes").
(c) The Loan Parties shall indemnify each Lender Party
and each Agent for and hold them harmless against the full amount of Taxes
and Other Taxes, and for the full amount of taxes of any kind imposed by
any jurisdiction on amounts payable under this Section 2.12, imposed on or
paid by such Lender Party or such Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. This indemnification shall be
made within 30 days from the date such Lender Party or such Agent (as the
case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, Group shall furnish to the Administrative Agent, at its address
referred to in Section 8.1 of the Intercreditor Agreement, the original or
a certified copy of a receipt evidencing such payment. In the case of any
payment made under the Loan Documents or under the Covered Facilities by or
on behalf of the Loan Parties through an account or branch outside the
United States or by or on behalf of the Loan Parties by a payor that is not
a United States person, if Group determines that no Taxes are payable in
respect thereof, Group shall furnish, or shall cause such payor to furnish,
to the Administrative Agent, at such address, an opinion of counsel
acceptable to the Debt Coordinators stating that such payment is exempt
from Taxes. For purposes of this Section 2.12, the terms "United States"
and "United States person" shall have the meanings specified in Section
7701 of the Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States, on or prior to the date that it
becomes a party to this Agreement or any Covered Facility, and from time to
time thereafter if requested in writing by Group or the agent under the
applicable Covered Facility (but only so long as such Lender Party remains
lawfully able to do so), shall provide Group and the agent under the
applicable Covered Facility with two original Internal Revenue Service
forms W-8 BEN or W-8 ECI, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender
Party is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to any Loan Document or Covered
Facility. If any Lender Party which is not a "United States person"
determines that it is unable to submit to Group or the agent under the
applicable Covered Facility any form or certificate that such Lender Party
is otherwise required to submit pursuant to this Section 2.12, or that is
required to withdraw or cancel any such form or certificate, or that any
such form or certificate previously submitted has otherwise become
ineffective or inaccurate, such Lender Party shall promptly notify Group
and the agent under the applicable Covered Facility of such fact. In
addition, if a Lender Party provides a form W-8 (or any successor form) to
the agent under the applicable Covered Facility and Group pursuant to this
Section 2.12, such Lender Party shall also provide a certificate stating
that it is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, and shall promptly notify the agent under the applicable Covered
Facility and Group if such Lender Party determines that it is no longer
able to provide such certification. If the form provided by a Lender Party
at the time such Lender Party first becomes a party to any Loan Document or
Covered Facility indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender Party provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such
lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of the
Joinder Agreement or relevant assignment and acceptance pursuant to which a
Lender Party becomes a party to the Intercreditor Agreement or any Covered
Facility, as applicable, the Lender Party or Lender Party assignor, as
applicable, was entitled to payments under subsection (a) in respect of
United States withholding tax with respect to interest paid at such date,
then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party or Lender Party assignee, as
applicable, on such date. Upon the reasonable request of Group or the agent
under the applicable Covered Facility, each Lender Party that has not
provided the forms or other documents, as provided above, on the basis of
being a United States person shall submit to Group and the agent under the
applicable Covered Facility a certificate to the effect that it is such a
"United States person" (as defined in Section 7701(a)(30) of the Internal
Revenue Code).
(f) For any period with respect to which a Lender Party
has failed to provide Group with the appropriate form described in Section
2.12(e) (other than if such failure is due to a change in law occurring
subsequent to the date on which such Lender Party became a Lender Party, or
if such form otherwise is not required under the first sentence of
subsection (e) above because Group has not requested in writing such form
subsequent to the date on which such Lender Party became a Lender Party),
such Lender Party shall not be entitled to indemnification under Section
2.12(a) or (c) with respect to Taxes imposed by the United States;
provided, however, that should a Lender Party become subject to Taxes
because of its failure to deliver a form required hereunder, Group shall
take such steps as the Lender Party or Debt Coordinators shall reasonably
request to assist the Lender Party to recover such Taxes.
(g) Any Lender Party claiming any additional amounts
payable pursuant to this Section 2.12 shall use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions)
to change the jurisdiction of its eurodollar lending office if the making
of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to
such Lender Party.
(h) Within 60 days after the written request of Group or
the Administrative Agent, each Lender Party shall execute and deliver to
Group such certificates or forms as are reasonably requested by Group in
such request, which can be furnished consistent with the facts and which
are reasonably necessary to assist the Loan Parties in applying for refunds
of Taxes paid by the Loan Parties hereunder or any Covered Facility or
making payment of Taxes hereunder or any Covered Facility; provided,
however, that no Lender Party or Agent shall be required to furnish to
Group any financial or other information which it considers confidential.
The cost of preparing any materials referred to in the previous sentence
shall be borne by Group. If a Lender Party or Agent determines in good
faith that it has received a refund of any Taxes or Other Taxes with
respect to which the Loan Parties have made a payment of additional
amounts, such Lender Party or Agent shall pay to Group an amount that such
Lender Party or Agent determines in good faith to be equal to the net
benefit, after tax, that was obtained by such Lender Party or Agent (as the
case may be) as a consequence of such refund.
SECTION 2.13. Payments and Computations. (a) Each Lender
Party and each Loan Party, as applicable, shall make each payment hereunder
and under each other Loan Document, not later than 11:00 A.M. (New York
City time) on the day when due in U.S. dollars to the Administrative Agent
at the Administrative Agent's Account in same day funds, with payments
being received by the Administrative Agent after such time being deemed to
have been received on the next succeeding Business Day. The Administrative
Agent will promptly thereafter cause like funds to be distributed in
accordance with the terms of the Intercreditor Agreement.
(b) All computations of amounts due under the Loan
Documents shall be made by the Debt Coordinators on the basis of a year of
360 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
amounts are payable. Each determination by the Debt Coordinators of an
amount due under the Loan Documents shall be conclusive and binding for all
purposes, absent manifest error.
(c) Whenever any payment under any of the Loan Documents
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest or commitment fee, as the case may be.
SECTION 2.14. Certain Post-Closing Matters. (a) With
respect to those Subsidiaries of Group incorporated or organized under the
laws of Belgium, Mexico, Hong Kong and Barbados, Group will cause to be
furnished, within 60 days after the Effective Date, all documents and
instruments, and cause to be performed, by such date, all actions, in each
case of the type specified in Section 6.1(a) with respect to Foreign Credit
Parties, including counterparts of this Agreement in form and substance
reasonably satisfactory to the Debt Coordinators and the Subsidiary
Guaranty executed and delivered by all Subsidiaries in such jurisdictions,
and such other documents sufficient in the judgment of the Debt
Coordinators to create in favor of the Collateral Trustee for the benefit
of the Secured Parties a perfected first priority security interest in the
property of all such Subsidiaries (other than Excluded Property), such
documents to include evidence of corporate good standing, corporate
authority and legal opinions, and all other related documentation; provided
that the Debt Coordinators may extend the 60 day time period specified in
this subsection (a) by up to an additional 45 days if requested by Group.
(b) With respect to all material intellectual property
license agreements to which Group or any of its Subsidiaries is a party
(other than any such license agreements which are the subject of actual
litigation between the licensor and licensee as of the Effective Date),
Group will use all commercially reasonable efforts to cause, within 30 days
after the Effective Date, all licensors party to such license agreements to
consent to a grant of a security interest in such license (but not to the
exercise by the Collateral Agent or any Secured Party of any remedies with
respect thereto) to the Collateral Trustee for the benefit of the Secured
Parties.
(c) Group will within 6 months after the Effective Date
either sell, transfer or otherwise dispose of the assets defined on
Schedule 2.6(d)(iii) as the Costa Rica Assets, Paris Apartment, German Real
Estate and NYC Apartment, with the Net Cash Proceeds therefrom applied as
specified in Section 2.9, or by such date, (i) Costa Rica will be deemed to
be an Included Foreign Jurisdiction for all purposes hereunder, and Group
will, by such date, cause to be furnished all documents and instruments,
and cause to be performed all actions, in each case of the type specified
in Section 6.1(a) with respect to Foreign Credit Parties, including the
execution and delivery of counterparts of this Agreement in form and
substance reasonably satisfactory to the Debt Coordinators and of the
Subsidiary Guaranty by all Subsidiaries in such jurisdictions, and such
other documents sufficient in the judgment of the Debt Coordinators to
create in favor of the Collateral Trustee for the benefit of the Secured
Parties a perfected first priority security interest in the relevant
property of such jurisdiction and (ii) with respect to all other assets
specified above, Group will, by such date, cause to be furnished all
documents and instruments, and cause to be performed all actions, in each
case of the type specified in Section 6.1(a) with respect to such assets as
are sufficient in the judgment of the Debt Coordinators to create in favor
of the Collateral Trustee for the benefit of the Secured Parties a
perfected first priority security interest in such assets.
(d) With respect to all leasehold mortgages to be
delivered pursuant to Section 6.1(a)(v), Group will use all commercially
reasonable efforts to cause, within 30 days after the Effective Date, all
landlords to consent to the granting of a leasehold mortgage in form and
substance satisfactory to the Debt Coordinators.
(e) With respect to the delivery of certain non-U.S.
Collateral, Group will cause to be furnished all documents and instruments,
and cause to be performed all actions, in each case of the type, and by the
respective dates, specified therefor in Schedule 2.14(e).
SECTION 2.15. Successor Agent. Citibank, N.A. hereby
resigns in its capacity as agent under each Existing Facility to which it
is a party as agent, and Citicorp USA, Inc. is hereby appointed as
successor agent in each such respective capacity under each such facility.
Citicorp USA, Inc. hereby accepts such appointment, and the "Required
Lenders" and the "Borrower" (each as defined in each such respective
facility) hereby approves such appointment.
SECTION 2.16. Certain Amendments. (a) (a) Section 2.03(c)
of the Old Five-Year Credit Agreement is amended by inserting the following
after the fourth sentence thereof:
"The obligation of each Revolving Credit Lender
to purchase an assignment of its Pro Rata Share
of the Letter of Credit Advance to refund and
refinance the Letter of Credit Advances
previously made by the Issuing Bank to the
Borrower under this clause shall be absolute and
unconditional and shall not be affected by any
circumstance, including (i) any set-off,
counterclaim, recoupment, defense or other right
which any Lender may have against the Issuing
Bank, the Administrative Agent, the Borrower or
any other Person for any reason whatsoever; (ii)
the occurrence or continuance of any Default or
the inability of the Borrower to otherwise
satisfy the conditions precedent set forth in
Article III; (iii) any adverse change in the
condition (financial or otherwise) of the
Borrower; (iv) the acceleration or maturity of
any Letter of Credit Advances or other
Obligations or the termination of any Commitment
after the making of any Letter of Credit
Advance; (v) any breach of this Agreement or any
other Loan Document by the Borrower, or any
Lender; or (vi) any other circumstance,
happening or event whatsoever, whether or not
similar to any of the foregoing."
(b) Section 2.03 of the Old Five-Year Credit Agreement is
further amended by inserting at the end thereof the following new clause
(e):
"(e) Reimbursement of Issuing Bank for Amounts
Returned or Disgorged. Each Letter of Credit
issued and each Letter of Credit Advance made,
shall, effective upon its issuance or creation,
as the case may be, and without further action,
be issued and/or created on behalf of all
Lenders (including the Issuing Bank thereof)
according to their respective Pro Rata Shares.
Each Lender shall, to the extent of its Pro Rata
Share, be deemed irrevocably to have
participated in the issuance of such Letter of
Credit and the creation of such Letter of Credit
Advance and shall be responsible to promptly
reimburse the Issuing Bank thereof for Letter of
Credit Advances which have not been reimbursed
by the Borrower or reimbursed by the Borrower
but must be returned, restored or disgorged by
the Issuing Bank for any reason, and each Lender
shall, to the extent of its Pro Rata Share, be
entitled to receive from the Administrative
Agent a ratable portion of all fees and interest
with respect to such Letter of Credit and/or
such Acceptance (including the letter of credit
fees received by the Administrative Agent, with
respect to each Letter of Credit, but excluding
any Issuing fees and other charges payable to
the Issuing Bank qua Issuing Bank). In the event
the Issuing Bank must for any reason return or
disgorge such reimbursement, the Issuing Bank
shall promptly notify each Lender of the
unreimbursed amount of such drawing and of such
Lender's respective participation therein. Each
Lender shall make available to the Issuing Bank,
whether or not any Default shall have occurred
and be continuing, an amount equal to its
respective participation in same day or
immediately available funds in accordance with
the procedures in Section 2.03(c). In the event
that any Lender fails to make available to the
Issuing Bank the amount of such Lender's
participation in such Letter of Credit or such
Letter of Credit Advance, as provided herein,
the Issuing Bank shall be entitled to recover
such amount on demand from such Lender together
with interest at the Federal Funds Rate from the
date such amount is due through (but excluding)
the date such payment is made (together with
such other compensatory amounts as may be
required to be paid by such Lender to the
Administrative Agent pursuant to the Rules for
Interbank Compensation of the council on
International Banking or the Clearinghouse
Compensation Committee, as the case may be, as
in effect from time to time).
(c) Section 2.05(c)(ii) of the Old Five-Year Credit
Agreement is amended by inserting after the word "Borrower" in the first
line thereof the following: ", and each Lender's obligation to risk
participate in Letters of Credit, in each case".
(d) Section 2.05(c) of the Old Five-Year Credit Agreement
is further amended by inserting at the end thereof the following new clause
(iii):
"(iii) The obligations of the Borrower and the Lenders
hereunder shall remain in full force and effect
and shall apply to any alteration to or
extension of the expiration date of any Letter
of Credit or any Letter of Credit issued to
replace, extend or alter any Letter of Credit
during the term of this Agreement. None of the
foregoing shall affect, impair or prevent the
vesting of any of the rights or powers granted
to the Issuing Bank or any Lender hereunder. In
furtherance and extension and not in limitation
or derogation of any of the foregoing, any
action taken or omitted to be taken by the
Issuing Bank in good faith (and not constituting
gross negligence or willful misconduct) shall be
binding upon each Borrower, and each such
Lender, and shall not put the Issuing Bank under
any resulting liability to any Borrower or any
such Lender, as the case may be."
(e) Section 8.07(a) of the Old Five-Year Credit Agreement
is amended by deleting the words "Administrative Agent and (so long as no
Default has occurred and is continuing) the Borrower, such consent not to
be unreasonably withheld or delayed" appearing starting in the 14th line
thereof, and inserting in lieu thereof the following: "Administrative
Agent, the Issuing Bank and Swing Line Bank".
(f) Section 8.07(a) of the Old Five-Year Credit Agreement
is further amended by deleting the amount "$1,000,000" appearing starting
in the 22nd line thereof, and inserting in lieu thereof the amount
"$500,000".
Article III
CONDITIONS OF LENDING AND EXTENSIONS OF CREDIT
SECTION 3.1. Conditions Precedent to Each Credit
Extension. The obligation of each Lender Party to make a loan, issue a
letter of credit, bankers' acceptance or other credit extension pursuant to
any Covered Facility and the right of any Loan Party to request a
borrowing, the issuance of a letter of credit, bankers' acceptance or to
request any other credit extension, shall be, in addition to the conditions
precedent present in the applicable Covered Facility, subject to the
further conditions precedent that on the date of such borrowing, issuance
or other credit extension (a) the following statements shall be true (and
the acceptance by such Loan Party of the proceeds of such borrowing,
issuance or other credit extension shall constitute a representation and
warranty by Group and such Loan Party that on the date of such borrowing,
issuance or other credit extension such statements are true):
(i) the representations and warranties contained in each
Loan Document are correct in all material respects on and as of
such date, before and after giving effect to such borrowing,
issuance of letter of credit, bankers' acceptance or other credit
extension and to the application of the proceeds therefrom, as
though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a
specific date other than the date of such borrowing, issuance of
letter of credit, bankers' acceptance or other credit extension,
in which case such representations and warranties shall be correct
in all material respects as of such specific date; and
(ii) no Default has occurred and is continuing under the
Loan Documents and no payment default has occurred and is
continuing under any Covered Facility, or would result from such
borrowing, issuance of letter of credit, bankers' acceptance or
other credit extension or from the application of the proceeds
therefrom;
and (b) the Administrative Agent shall have received such other information
as the Debt Coordinators may reasonably request in order to confirm the (i)
accuracy of the representations and warranties of the Loan Parties in the
Loan Documents and Covered Facilities, (ii) timely compliance by the Loan
Parties with the terms, covenants and agreements set forth in the Loan
Documents and the Covered Facilities and (iii) absence of any Default under
the Loan Documents or the Covered Facilities.
Article IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties of the Loan
Parties. Each Loan Party represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is a
corporation or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, (ii) is duly qualified and in good standing as a foreign
corporation or otherwise in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be
licensed would not be reasonably likely to have a Material Adverse Effect
and (iii) has all requisite corporate (or other) power and authority
(including, without limitation, all material governmental licenses, permits
and other approvals) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted.
(b) Set forth on Schedule 4.1(b) hereto is a complete and
accurate list of all Subsidiaries of Group on the date hereof, showing (as
to each such Subsidiary) the jurisdiction of its incorporation or
organization, the number of shares of each class of its Equity Interests
authorized, and the number outstanding, on the date hereof and the
percentage of each such class of its Equity Interests owned (directly or
indirectly) by such Loan Party and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the date hereof. Schedule 4.1(b) also identifies all Foreign
Subsidiaries of Group in the Included Foreign Jurisdictions which (i) are
classified as inactive or dormant (or other similar designation) under the
applicable laws of any Included Foreign Jurisdiction or (ii) have assets
with an aggregate fair market value of less than $150,000. All of the
outstanding Equity Interests in each Loan Party's Subsidiaries have been
validly issued, are fully paid and non-assessable and are owned by such
Loan Party or one or more of its Subsidiaries (except as described on
Schedule 4.1(b)) free and clear of all Liens, except those created under
the Collateral Documents.
(c) The execution, delivery and performance by each Loan
Party of each Loan Document and each Covered Document to which it is or is
to be a party and the other transactions contemplated by the Loan Documents
and the Covered Documents, are within such Loan Party's corporate or other
powers, have been duly authorized by all necessary corporate or other
action, and do not (i) contravene such Loan Party's charter or bylaws or
other constitutive documents, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries or any of their properties or (iv)
except for the Liens created under the Loan Documents and the Covered
Documents, result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which would be reasonably likely to have a Material
Adverse Effect.
(d) Except as specified in Section 2.14, as set forth on
Schedule 4.1(d) or for which provision has been duly made, no authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is
required for (i) the due execution, delivery, recordation, filing or
performance by any Loan Party of any Loan Document and any Covered Document
to which it is or is to be a party, or the other transactions contemplated
by the Loan Documents and the Covered Documents, (ii) the grant by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents and
the Covered Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first priority nature
thereof) and the Covered Documents or (iv) the exercise by any Agent or any
Lender Party of its rights under the Loan Documents and the Covered
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents and the Covered Documents.
(e) This Agreement and each Covered Document has been,
and each other Loan Document when delivered will have been, duly executed
and delivered by each Loan Party party thereto. This Agreement and each
Covered Document is, and each other Loan Document when delivered will be,
the legal, valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in equity or at law).
(f) There is no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries or any of
its or their respective properties, including any Environmental Action,
pending or threatened before any court, governmental agency or arbitrator
that (i) would be reasonably likely to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of any
Loan Document or Covered Document or the transactions contemplated by the
Loan Documents and the Covered Documents.
(g) The Consolidated balance sheet of Group and its
Subsidiaries as at January 1, 2000, and the related Consolidated statements
of operations, stockholders' equity and cash flow of Group and its
Subsidiaries for the Fiscal Year then ended, accompanied by an unqualified
opinion of Deloitte & Touche LLP, and the Consolidated balance sheet of
Group and its Subsidiaries as at July 1, 2000, and the related Consolidated
statements of operations, stockholders' equity and cash flow of Group and
its Subsidiaries for the six months then ended, duly certified by a
Responsible Financial Officer of Group, copies of which have been furnished
to each Lender Party, fairly present, subject, in the case of said balance
sheet as at July 1, 2000, and said statements of operations, stockholders'
equity and cash flow for the six months then ended, to year-end audit
adjustments, the Consolidated financial condition of Group and its
Subsidiaries as at such dates and the Consolidated results of operations of
Group and its Subsidiaries for the periods ended on such dates, all in
accordance with GAAP applied on a consistent basis.
(h) The Consolidated forecasted balance sheet, statements
of operations, stockholders' equity and cash flow of Group and its
Subsidiaries delivered to the Lender Parties pursuant to Section 2.8 and
6.1(a)(xiv) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in light of the conditions
existing at the time of delivery of such forecasts, and represented, at the
time of delivery, Group's best estimate of its future financial
performance.
(i) There shall have occurred no material adverse change
in (i) the business, condition (financial or otherwise), operations,
performance, properties or prospects of Group and its Subsidiaries, taken
as a whole, from that which was, in each case on and as of the Effective
Date, either publicly disclosed, or otherwise furnished in writing to the
Lender Parties, by or on behalf of Group, (ii) the ability of any Loan
Party to perform its obligations under the Loan Documents or (iii) the
ability of the Administrative Agent, the Collateral Trustee, the Debt
Coordinators or the Lender Parties to enforce the Loan Documents.
(j) The written information, exhibits and reports
furnished by or on behalf of any Loan Party to any Agent or any Lender
Party in connection with the negotiation of the Loan Documents or pursuant
to the terms of the Loan Documents, taken as a whole, contained no untrue
statement of a material fact and did not omit to state a material fact
necessary to make the statements made therein not misleading.
(k) Neither any Loan Party nor any of its Subsidiaries is
engaged in the business of extending credit for the purpose of purchasing
or carrying Margin Stock, and no proceeds of any loan or drawing under any
letter of credit or bankers' acceptance or other credit extension under any
Covered Facility will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any
Margin Stock (except for purchases of Group Equity Interests pursuant to
the Equity Derivatives).
(l) Neither any Loan Party nor any of its Subsidiaries is
an "investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any loan, nor the issuance of any letter of credit or bankers'
acceptance or any other credit extension under any Covered Facility, nor
the application of the proceeds or repayment thereof by any Loan Party or
any of its Subsidiaries, nor the consummation of the other transactions
contemplated by the Loan Documents, will violate any provision of such Act
or any rule, regulation or order of the Securities and Exchange Commission
thereunder.
(m) Neither any Loan Party nor any of its Subsidiaries is
a party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate restriction
that would be reasonably likely to have a Material Adverse Effect.
(n) The Collateral Documents create a valid and perfected
first priority security interest (to the extent applicable) in the
Collateral, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken or provided for. The Loan
Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the liens and security interests created or
permitted under the Loan Documents, and where applicable, the Covered
Facilities.
(o) Each Loan Party is, individually and together with
its Subsidiaries, Solvent.
(p) Set forth on Schedule 4.1(p) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans on the
date hereof. Except as set forth on Schedule 4.1(p):
(i) No ERISA Event has occurred or is reasonably expected
to occur with respect to any Plan that has resulted in or is
reasonably expected to result in a material liability of any Loan
Party or any ERISA Affiliate.
(ii) Schedule B (Actuarial Information) to the most
recent annual report (Form 5500 Series) for each Plan, copies of
which have been filed with the Internal Revenue Service and
furnished to the Lender Parties, is complete and accurate and
fairly presents the funding status of such Plan, and since the
date of such Schedule B there has been no material adverse change
in such funding status.
(iii) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal
Liability exceeding $5,000,000 to any Multiemployer Plan.
(iv) Neither any Loan Party nor any ERISA Affiliate has
been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and no such Multiemployer
Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA.
(q) (i) The operations and properties of each Loan Party
and each of its Subsidiaries comply in all material respects with all
applicable Environmental Laws and Environmental Permits, all material past
non-compliance with such Environmental Laws and Environmental Permits has
been resolved without ongoing material obligations or costs, and no
circumstances exist that would be reasonably likely to (A) form the basis
of an Environmental Action against any Loan Party or any of its
Subsidiaries or any of their properties that could be reasonably expected
to have a Material Adverse Effect or (B) cause any such property to be
subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(ii) None of the properties currently or formerly owned
or operated by any Loan Party or any of its Subsidiaries is, to
the knowledge of any Loan Party with respect to formerly owned
properties, listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property, except where such listing would not
reasonably be expected to have a Material Adverse Effect; there
are no and never have been any underground or aboveground storage
tanks or any surface impoundments, septic tanks, pits, sumps or
lagoons in which Hazardous Materials are being or have been
treated, stored or disposed on any property currently owned or
operated by any Loan Party or any of its Subsidiaries or, to the
best of its knowledge, on any property formerly owned or operated
by any Loan Party or any of its Subsidiaries that in any case
could reasonably be expected to have a Material Adverse Effect;
there is no asbestos or asbestos-containing material on any
property currently owned or operated by any Loan Party or any of
its Subsidiaries that in any case could reasonably be expected to
have a Material Adverse Effect; and Hazardous Materials have not
been released, discharged or disposed of on any property currently
or, to the best knowledge of the Loan Parties, formerly owned or
operated by any Loan Party or any of its Subsidiaries that in any
case could reasonably be expected to have a Material Adverse
Effect.
(iii) Neither any Loan Party nor any of its Subsidiaries
is undertaking, and has not completed, either individually or
together with other potentially responsible parties, any
investigation or assessment or remedial or response action
relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any
Environmental Law that in any case could reasonably be expected to
have a Material Adverse Effect; and all Hazardous Materials
generated, used, treated, handled or stored at, or transported to
or from, any property currently or formerly owned or operated by
any Loan Party or any of its Subsidiaries have been disposed of in
a manner not reasonably expected to result in material liability
to any Loan Party or any of its Subsidiaries.
(r) (i) Each Loan Party and each of its Subsidiaries and
Affiliates has filed, has caused to be filed or has been included in all
tax returns (Federal, state, local and foreign) required to be filed and
has paid all taxes shown thereon to be due, together with applicable
interest and penalties. (ii) Set forth on Schedule 4.1(r) hereto is a
complete and accurate list, as of the date hereof, of each taxable year of
each Loan Party and each of its Subsidiaries and Affiliates for which
Federal income tax returns have been filed and for which the expiration of
the applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an "Open Year").
(ii) The aggregate unpaid amount, as of the date hereof,
of adjustments to the Federal income tax liability of each Loan
Party and each of its Subsidiaries and Affiliates proposed by the
Internal Revenue Service with respect to Open Years does not
exceed $5,000,000. Set forth on Schedule 4.1(r) hereto is a
complete and accurate description, as of the date hereof, of each
such item that separately, for all such Open Years, together with
applicable interest and penalties, exceeds $1,000,000. No issues
have been raised by the Internal Revenue Service in respect of
Open Years that, in the aggregate, would be reasonably likely to
have a Material Adverse Effect.
(iii) The aggregate unpaid amount, as of the date hereof,
of adjustments to the state, local and foreign tax liability of
each Loan Party and its Subsidiaries and Affiliates proposed by
all state, local and foreign taxing authorities (other than
amounts arising from adjustments to Federal income tax returns)
does not exceed $5,000,000. No issues have been raised by such
taxing authorities that, in the aggregate, would be reasonably
likely to have a Material Adverse Effect.
(s) Neither the business nor the properties of any Loan
Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that would be reasonably likely to
have a Material Adverse Effect.
(t) Set forth on Schedule 4.1(t) hereto is a complete and
accurate list of all Liens on the property or assets of any Loan Party on
the date hereof, showing the lienholder thereof and the property or assets
of such Loan Party subject thereto.
(u) Set forth on Schedule 4.1(u) hereto is a complete and
accurate list of all Material Real Property owned by any Loan Party on the
date hereof, showing the street address, county or other relevant
jurisdiction, state and record owner thereof. Each Loan Party or such
Subsidiary has good and marketable fee simple title to such real property,
free and clear of all Liens, other than Liens created or permitted by the
Loan Documents.
(v) Set forth on Schedule 4.1(v) hereto is a complete and
accurate list of all Material Leased Property under which any Loan Party or
any of its Subsidiaries is the lessee on the date hereof, showing the
street address, county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof.
(w) Set forth on Schedule 4.1(w) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries on the date hereof, showing the amount, obligor or issuer and
maturity, if any, thereof.
(x) Set forth on Schedule 4.1(x) hereto is a complete and
accurate list as of the date hereof of all United States and Included
Foreign Jurisdiction patents, trademarks, trade names, service marks and
registered copyrights, and all applications therefor, of each Credit Party,
showing the United States and each Included Foreign Jurisdiction in which
registered, the registration number and the date of registration.
(y) Each Foreign Subsidiary owned directly or indirectly
by Group is either a "controlled foreign corporation", as defined under
Section 957 of the Code, or owned, directly or indirectly, by one or more
"controlled foreign corporations".
Article V
EVENTS OF DEFAULT
SECTION 5.1. Events of Default. If any of the following
events ("Events of Default") shall occur hereunder, or under any other Loan
Document, and be continuing:
(a) any Loan Party shall fail to pay any amounts payable
under any Loan Document after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party
(or any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made; or
(c) any Loan Party shall fail to perform or observe any
term, covenant or agreement contained in Section 2.5(f), (j), (k), (m) or
Section 2.6, 2.7, 2.8 or 2.9; or
(d) any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document or any
Covered Document (to the extent not superseded and replaced pursuant to
Section 2.1 hereof) on its part to be performed or observed if such failure
shall remain unremedied for 10 Business Days (i) after written notice
thereof shall have been given to such Loan Party by the Debt Coordinators
or (ii) if earlier, after any Authorized Officer of Group or Warnaco
obtains knowledge thereof; or
(e) any Loan Party or any of its Subsidiaries shall fail
to pay any principal of or premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or
reimbursement amount (or, in the case of any Hedge Agreement, its Agreement
Value) of (i) with respect to any Covered Facility, at least $5,000,000 or
(ii) with respect to any Debt, at least $20,000,000 in the aggregate; in
any case either individually or in the aggregate of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and payable
whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise, and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt as specified in clause
(ii) and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity
of such Debt as specified in clause (ii) or otherwise to cause, or to
permit the holder thereof to cause, such Debt as specified in clause (ii)
to mature; or any such Debt as specified in clause (ii) shall be declared
to be due and payable or is then required to be prepaid or redeemed (other
than by a regularly scheduled required prepayment or redemption), purchased
or defeased, or an offer to prepay, redeem, purchase or defease such Debt
as specified in clause (ii) shall be then required to be made, in each case
prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries (other than
any Immaterial Subsidiary) shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against any Loan Party or any
of its Subsidiaries (other than any Immaterial Subsidiary) seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries (other
than any Immaterial Subsidiary) shall take any corporate action to
authorize any of the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in
excess of $20,000,000 shall be rendered against any Loan Party or any of
its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect, provided however that any judgment or order shall not
give rise to an Event of Default if and for so long as (A) the amount of
such judgment or order which remains unsatisfied is covered by a valid and
binding insurance policy issued by an insurer rated at least "A" by A.M.
Best and covering full payment thereof and (B) such insurer has been
notified, and has not disputed the claim made for payment, of the amount of
such judgment or order; or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be reasonably
likely to have a Material Adverse Effect, and there shall be any period of
10 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(i) any provision of any Loan Document, after delivery
thereof pursuant to Section 2.5(k) or 6.1, shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it, or
any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof
pursuant to Section 2.5(k) or 6.1 shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority
lien on and security interest in the Collateral purported to be covered
thereby; or
(k) (i) Group shall at any time cease to have legal and
beneficial ownership of 100% of the capital stock of Warnaco, or, directly
or indirectly, any other Loan Party (except (A) if such parties shall merge
in accordance with Section 2.6(c) and (B) as described in the definition of
Wholly-Owned Subsidiary); or (ii) any Person, or two or more Persons acting
in concert (other than Excluded Persons), shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of Group (or other securities convertible into
such Voting Stock) representing 25% or more of the combined voting power of
all Voting Stock of Group; or (iii) any Person, or two or more Persons
acting in concert (other than Excluded Persons) shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of, the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of Group, or control over Voting Stock of Group (or
other securities convertible into such securities) representing 25% or more
of combined voting power of all Voting Stock of Group; or (iv) Continuing
Directors shall cease for any reason to constitute a majority of the board
of directors of Group; or (v) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or, in the case of her
death or disability, another officer or officers of comparable experience
and ability selected by Group within 180 days thereafter after consultation
with the Debt Coordinators) shall cease to be Chairman and Chief Executive
Officer of Group and Warnaco; or
(l) any ERISA Event shall have occurred with respect to a
Plan and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any and
all other Plans with respect to which an ERISA Event shall have occurred
and then exist (or the liability of the Loan Parties and the ERISA
Affiliates related to such ERISA Event) exceeds $5,000,000; or state in
writing; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification), exceeds $5,000,000 or
requires payments exceeding $5,000,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $5,000,000;
then, and in any such event, the Debt Coordinators (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to
Group, declare all commitments of each Lender Party and the obligation of
each Lender Party under the Covered Facilities to make loans, issue letters
of credit or bankers' acceptances or make other credit extensions (other
than reimbursements to other Lender Parties in respect of loans and drawn
letters of credit and bankers' acceptances) to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Required Lenders, (A) by notice to Group, declare all
loans, all interest thereon and all other amounts payable under the Covered
Facilities and the Loan Documents to be forthwith due and payable,
whereupon the loans, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by all
of the Loan Parties, (B) by notice to each party required under the terms
of any agreement in support of which a letter of credit or bankers'
acceptance is issued, request that all Obligations under such agreement be
declared to be due and payable and (C) by notice to each applicable letter
of credit and bankers' acceptance issuing bank, direct such issuing bank to
deliver a "default termination notice" (or similar notice) to the
beneficiary of each letter of credit or bankers' acceptance issued by it,
and such issuing bank shall deliver such default termination notices (or
similar notices); provided that in the event of an actual or deemed entry
of an order for relief with respect to Group or any of its Subsidiaries
under the Federal Bankruptcy Code (a "Bankruptcy Event"), (x) the
commitments of each Lender Party and the obligation of each Lender Party to
make loans, issue letter of credit, bankers' acceptance or other credit
extensions under the Covered Facilities (other than reimbursements to other
Lender Parties in respect of drawn letters of credit and bankers'
acceptances) shall automatically be terminated and (y) all loans under all
Covered Facilities, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by all Loan Parties.
Article VI
CONDITIONS OF EFFECTIVENESs
SECTION 6.1. Conditions of Effectiveness. Articles II and
III of this Agreement shall become effective as of the date first above
written (the "Effective Date") when and only when all of the conditions set
forth in this Article VI have been satisfied.
(a) The Administrative Agent shall have received (except
as otherwise specified in Section 2.14) on or before the Effective Date the
following, each dated such day (unless otherwise specified), in form and
substance satisfactory to, or waived by, the Debt Coordinators (unless
otherwise specified) and in sufficient copies for each Lender Party:
(i) A counterpart of this Agreement executed by each Loan
Party, the Collateral Trustee, the Administrative Agent and the
Debt Coordinators.
(ii) A security agreement in substantially the form of
Exhibit A hereto (together with (A) each other security agreement
and security agreement supplement delivered pursuant to Section
2.5(k), and (B) with respect to each Included Foreign Subsidiary,
one or more security agreements securing such Credit Parties'
Obligations; in each of the foregoing cases as amended,
collectively, the "Security Agreement"), duly executed by each
Credit Party, together with the following instruments and
documents:
(1) certificates representing the Pledged Shares
(other than where the Pledged Shares are
uncertificated) referred to therein accompanied,
where applicable, by undated stock powers
executed in blank and instruments evidencing the
Pledged Debt indorsed in blank (or other
notations or actions as may be required under
local law to perfect the pledge of the Pledged
Shares),
(2) proper financing statements in form for filing,
under the Uniform Commercial Code of all
jurisdictions that the Debt Coordinators may
deem necessary or desirable in order to perfect
and protect the first priority liens and
security interests created under the Security
Agreement, covering the Collateral described in
the Security Agreement,
(3) completed requests for information, dated on or
before the Effective Date, listing all effective
financing statements filed in the jurisdictions
referred to in clause (2) above that name any
U.S. Credit Party as debtor, together with
copies of such other financing statements,
(4) preparation and execution of all other
recordings and filings of or with respect to the
Security Agreement that the Debt Coordinators
may reasonably deem necessary or desirable in
order to create a valid first priority Lien
against the applicable Collateral (subject to
Permitted Liens and excluding all filings
necessary to perfect security interests in
Collateral consisting of fixtures located in
third party retail locations and used to display
finished goods in such locations), including,
with respect to Foreign Credit Parties, such
local law pledge agreements, deeds of trust,
powers of attorney, notations in shareholders'
registries, or such other documents or
instruments as may be required under local law
to create and perfect security interests in the
applicable Collateral, in each case as
determined by, and in form and substance
satisfactory to, the Debt Coordinators,
(5) evidence of the insurance required by the terms
of the Security Agreement, and
(6) evidence that all other action that the Debt
Coordinators may deem necessary or desirable in
order to perfect and protect the first priority
liens and security interests created under the
Security Agreement will be taken (including,
without limitation, receipt of duly executed
payoff letters and UCC-3 termination
statements).
(iii) A Domestic Subsidiary Guaranty, together with (A)
each other Domestic Subsidiary Guaranty Supplement delivered
pursuant to Section 2.5(k) and (B) with respect to each Included
Foreign Subsidiary, a guaranty of such of the other Loan Parties'
Obligations under those Existing Facilities as was guaranteed by
such Subsidiary immediately prior to the Effective Date, in form
and substance reasonably acceptable to the Debt Coordinators; in
each of the foregoing cases as amended, (collectively, the
"Subsidiary Guaranty"), duly executed by each Credit Party other
than Group.
(iv) A guaranty in substantially the form of Exhibit C
hereto (as amended, the "Parent Guaranty"), duly executed by
Group.
(v) (A) Deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust in substantially the form
of Exhibit D hereto and covering the properties listed on Schedule
4.1(u) and Part A of Schedule 4.1(v) (together with the
Assignments of Leases and Rents referred to therein and each other
mortgage delivered pursuant to Section 2.5(k)), in each case as
amended, the "Mortgages") and (B) assignments of leases and rents
to a special purpose Subsidiary of Group (other than Warnaco
Operations Corporation), with respect to those leases described in
Part A of Schedule 4.1(v) as to which the landlord has not
consented to the granting of a leasehold mortgage or leasehold
deed of trust in form and substance satisfactory to the Debt
Coordinators (together with the assignments of leases and rents
delivered pursuant to Section 2.5(k)), to the extent such
assignment is permitted by the applicable lease, in each case as
amended, the "Leasehold Assignments"); in each case duly executed
by the appropriate Credit Party, together with the following
instruments and documents:
(1) evidence that counterparts of the Mortgages have
been duly executed on or before the Effective
Date and will be recorded on or after the
Effective Date in all filing or recording
offices that the Debt Coordinators may deem
reasonably necessary or desirable in order to
create a valid first and subsisting Lien on the
property described therein in favor of the
Collateral Trustee for the benefit of the
Secured Parties and that all filing and
recording taxes and fees have been paid,
(2) fully paid American Land Title Association
Lender's Extended Coverage title insurance
policies or marked-up unconditional commitments
to insure (the "Mortgage Policies") in form and
substance, with endorsements and in amounts
reasonably acceptable to the Debt Coordinators,
issued, coinsured and reinsured by title
insurers reasonably acceptable to the Debt
Coordinators (but not to exceed the fair market
value of such property), insuring the Mortgages
to be valid first and subsisting Liens on the
property described therein, free and clear of
all defects (including, but not limited to,
mechanics' and materialmen's Liens) and
encumbrances, excepting only Permitted Liens,
and providing for such other affirmative
insurance (including endorsements for future
advances under the Loan Documents and for
mechanics' and materialmen's Liens) and such
coinsurance and direct access reinsurance as the
Debt Coordinators may deem necessary or
desirable,
(3) the Assignments of Leases and Rents in form
attached to the Mortgages, duly executed by the
appropriate Loan Party,
(4) such consents and agreements of lessors and
other third parties, and such estoppel letters
and other confirmations, as the Debt
Coordinators may reasonably deem necessary or
desirable,
(5) evidence of the insurance, if any, required by
the terms of the Mortgages, and
(6) evidence that all other action that the Debt
Coordinators may deem reasonably necessary or
desirable in order to create valid first and
subsisting Liens on the property described in
the Mortgages has been taken.
Notwithstanding anything to the contrary
contained in this Section 6.1(a)(v), in the
event that the provisions of any lease for any
Material Leased Property require that the tenant
obtain the consent of the landlord prior to (i)
mortgaging or encumbering such lease or (ii)
assigning its interest in such lease, the
applicable Credit Party shall use commercially
reasonable efforts (which shall not include the
payment of money to such landlord to satisfy any
other condition in connection with the giving of
such consent) to obtain such consent(s) from the
landlord and, in the event the applicable Credit
Party is unable to obtain such consent(s) after
using commercially reasonable efforts, the
applicable Credit Party shall deliver written
notice thereof to the Debt Coordinators and
shall have no further obligation to deliver the
Mortgage or lease assignment to the Debt
Coordinators with respect to such Material
Leased Property.
(vi) Intellectual property security agreements in
substantially the form of Exhibit E-1 and E-2 hereto (together
with each other intellectual property security agreement and
intellectual property security agreement supplement delivered
pursuant to Section 2.5(k), in each case as amended, collectively,
the "Intellectual Property Security Agreement"), duly executed by
each Credit Party, together with evidence that all action that the
Debt Coordinators may reasonably deem necessary or desirable in
order to perfect and protect the first priority liens and security
interests required to be created under the Intellectual Property
Security Agreement has been taken or provided for.
(vii) A Collateral Trust Agreement in substantially the
form of Exhibit F hereto (as amended, the "Collateral Trust
Agreement"), duly executed by Group, the Collateral Trustee and
the Debt Coordinators.
(viii) Certified copies of the resolutions of the Board
of Directors (or other equivalent body) of each Loan Party (and,
where necessary, resolutions of the shareholders of the Loan
Parties) approving the transactions contemplated by the Loan
Documents and each Loan Document to which it is or is to be a
party, and of all documents evidencing other necessary corporate
action and governmental and other third party approvals and
consents, if any, with respect to the other transactions
contemplated by the Loan Documents and each Loan Document to which
it is or is to be a party.
(ix) A copy of a certificate of the Secretary of State
(or equivalent agency) of the jurisdiction of incorporation or
organization of each Loan Party, dated reasonably near the
Effective Date, certifying (A) as to a true and correct copy of
the charter (or other constitutive documents) of such Loan Party
and each amendment thereto on file in such Secretary's (or
equivalent) office and (B) that (1) such amendments are the only
amendments to such Loan Party's charter (or other constitutive
documents) on file in such Secretary's (or equivalent) office, (2)
such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated or
organized and in good standing or presently subsisting under the
laws of the jurisdiction of its incorporation.
(x) A certificate of each Loan Party, signed on behalf of
such Loan Party by its President or a Vice President and its
Secretary or any Assistant Secretary or a director (or other
equivalent officer), dated the Effective Date (the statements made
in which certificate shall be true on and as of the Effective
Date), certifying as to (A) the absence of any amendments to the
charter (or other constitutive documents) of such Loan Party since
the date of the governmental certificate referred to in Section
6.1(a)(ix), (B) a true and correct copy of the bylaws (or other
constitutive documents) of such Loan Party as in effect on the
date on which the resolutions referred to in Section 6.1(a)(viii)
were adopted and on the Effective Date, (C) the due incorporation
and good standing or valid existence of such Loan Party as a
corporation organized under the laws of the jurisdiction of its
incorporation or organization, and the absence of any proceeding
for the dissolution or liquidation of such Loan Party, (D) the
truth of the representations and warranties contained in the Loan
Documents as though made on and as of the Effective Date and (E)
the absence of any event occurring and continuing under the Loan
Documents that constitutes a Default, and such certificate
otherwise being in such form as the Debt Coordinators shall
approve.
(xi) A certificate of the director or Secretary or an
Assistant Secretary of each Loan Party certifying the names and
true signatures of the officers of such Loan Party authorized to
sign each Loan Document to which it is or is to be a party and the
other documents to be delivered hereunder and thereunder.
(xii) A certificate of a Responsible Financial Officer of
Group, in form and substance satisfactory to the Debt
Coordinators, attesting to the Solvency of each Loan Party.
(xiii) Appraisals of intellectual property from ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ & Zukin.
(xiv) Such financial, business and other information
regarding each Loan Party and its Subsidiaries as the Lender
Parties shall have requested, including, without limitation,
information as to possible contingent liabilities, tax matters,
environmental matters, obligations under Plans, Multiemployer
Plans and Welfare Plans, collective bargaining agreements and
other arrangements with employees, interim financial statements
dated July 1, 2000 and audited annual financial statements dated
January 1, 2000, in form and substance satisfactory to the Debt
Coordinators.
(xv) Evidence, in form and substance satisfactory to the
Debt Coordinators, that all applicable Environmental Laws shall
have been complied with in all material respects. To the extent
that any information that may become available to the Debt
Coordinators or any Lender Parties shall disclose any hazards,
costs or liabilities under Environmental Laws or otherwise that
the Debt Coordinators deem material, the Debt Coordinators shall
be satisfied that such hazards, costs or liabilities were
adequately reflected in the financial reserves shown on the
financial statements provided pursuant to Section 6.1(a)(xiv).
(xvi) Evidence of insurance naming the Collateral Trustee
as additional insured and loss payee with such responsible and
reputable insurance companies or associations, and in such amounts
and covering such risks, as is satisfactory to the Debt
Coordinators, including, without limitation, business interruption
insurance.
(xvii) A favorable opinion of (i) ▇.▇. ▇▇▇▇▇▇ & Co.,
local counsel to the Loan Parties in the United Kingdom, (ii)
Stibbe Simont ▇▇▇▇▇▇▇ Durhot & ▇▇▇▇▇▇, local counsel to the Loan
Parties in France, (iii) Lovells Boesebeck Droste, local counsel
to the Loan Parties in Germany, (iv) Loyens Loeff, local counsel
to the Loan Parties in the Netherlands, (v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, local counsel to the Loan Parties in Canada, (vi) Tuke,
▇▇▇▇ & ▇▇▇▇▇▇▇, PLC, local counsel to the Loan Parties in
Tennessee, (vii) Obermeyer, Rebmann, local counsel to the Loan
Parties in Pennsylvania, (viii) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, local counsel
to the Loan Parties in Connecticut, (ix) Womble, Carlisle,
▇▇▇▇▇▇▇▇▇ & Rice, local counsel to the Loan Parties in Georgia,
(x) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special New York
counsel to the Loan Parties, (xi) General Counsel to the Loan
Parties and (xii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special
intellectual property counsel to the Loan Parties in substantially
the form of Exhibit H-1 through H-12 hereto, and as to such other
matters as any Lender Party through the Debt Coordinators may
reasonably request in form and substance satisfactory to the Debt
Coordinators.
(xviii) Certified copies of the Existing Facilities.
(b) Group shall have paid all (i) accrued fees of the
Agents and the Lender Parties to the Administrative Agent for deposit in
the Administrative Agent's Account, and the Administrative Agent will
distribute such funds to the Lender Parties not later than the next
succeeding Business Day thereafter and (ii) all accrued expenses of the
Agents (including the accrued fees and expenses of counsel to the Debt
Coordinators) invoiced prior to the Effective Date.
(c) Each Loan Party which is a Foreign Subsidiary shall
have appointed Corporation Service Company as its agent to receive service
of process, in accordance with the provisions specified in Section 9.6(c)
hereof.
(d) The following statements shall be true and the
Administrative Agent shall have received on behalf of each Lender Party a
certificate signed by a duly authorized officer of Group, dated the
Effective Date, stating that:
(i) the representations and warranties contained in each
Loan Document and in each Covered Facility are correct on and as
of the Effective Date, other than any such representations or
warranties that, by their terms, refer to a specific date other
than the Effective Date, in which case as of such specific date;
and
(ii) no Default has occurred and is continuing, or would
result from the transactions contemplated by this Agreement and
the other Loan Documents;
(e) Group shall have delivered the Modification Notes
required to be delivered under the Memoranda of Understanding as in effect
on the Effective Date and referred to in items B.18 and B.19 of Schedule II
to the Intercreditor Agreement and shall have paid the amounts required to
be paid under Section 2 of such Memoranda of Understanding; and
(f) the Administrative Agent shall have received such
other approvals, opinions or documents as the Debt Coordinators may
reasonably request.
SECTION 6.2. Determinations Under Section 6.1. For
purposes of determining compliance with the conditions specified in Section
6.1, each Lender Party shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory
to the Lender Parties unless an officer of the Debt Coordinators
responsible for the transactions contemplated by the Loan Documents shall
have received notice from such Lender Party prior to the Effective Date
specifying its objection thereto.
Article VII
EFFECTIVE DATE PAYMENTS AND COMMITMENT REDUCTIONS
SECTION 7.1. Facility Reductions. On the Effective Date,
the committed amounts of the Covered Facilities shall be reduced and
certain amounts reallocated as described in Schedule 7.1 (which Schedule
will specify in detail the allocations to be made in respect of each
Covered Facility). To the extent the aggregate outstanding credit
extensions under any Covered Facility exceed the aggregate commitments
thereunder (as so reduced), such credit extensions constituting loans shall
be prepaid by depositing sufficient funds with the Administrative Agent in
the Administrative Agent's Account on the Effective Date in the amount of
such excess, and the Administrative Agent will distribute such funds to the
Lender Parties not later than the next succeeding Business Day thereafter.
SECTION 7.2. Extension Fee. On the Effective Date, Group
shall pay to the Administrative Agent for deposit in the Administrative
Agent's Account, for the pro rata benefit of the Lender Parties party to
the Extending Facilities and the New Trade Credit Facility, an extension
fee of 0.75% of the outstanding commitments, and, without duplication,
loans and other credit extensions outstanding, under each of the Extending
Facilities, and the Administrative Agent will distribute such funds to the
Lender Parties not later than the next succeeding Business Day thereafter.
SECTION 7.3. Approval Fee. On the Effective Date, Group
shall pay to the Administrative Agent for deposit in the Administrative
Agent's Account, for the pro rata benefit of the Lender Parties party to
the Existing Facilities that are not Extending Facilities and who execute
and deliver this Agreement, an amendment fee of 0.25% of the outstanding
principal balance of the term loans and revolving credit commitments of
such Lender Parties outstanding under such Existing Facilities, and the
Administrative Agent will distribute such funds to the Lender Parties not
later than the next succeeding Business Day thereafter.
Article VIII
THE DEBT COORDINATORS, ADMINISTRATIVE AGENT
AND COLLATERAL TRUSTEE
SECTION 8.1. Duties. The Debt Coordinators, the
Administrative Agent and the Collateral Trustee (i) shall have no duties or
responsibilities under this Agreement other than as specifically provided
hereunder, together with such powers and discretion as are reasonably
incidental thereto, (ii) shall be entitled to advice of counsel concerning
all matters pertaining to their powers and duties hereunder, (iii) shall
not be responsible for the negligence or misconduct of any agents, nominees
or attorneys-in-fact reasonably selected by them, (iv) may rely, and shall
be fully protected in acting, upon any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order or other paper
or document which it believes in good faith to be genuine and to have been
signed or presented by the proper party or parties or, in the case of
telecopies, to have been sent by the proper party or parties to the Debt
Coordinators, the Administrative Agent or the Collateral Trustee, as
applicable, (v) shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders or all of the Lender Parties, as
applicable, and such instructions shall be binding upon all Lender Parties;
provided that neither Debt Coordinator, the Administrative Agent nor the
Collateral Trustee shall be required to take any action that exposes them
to personal liability or that is contrary to this Agreement or the other
Loan Documents or applicable law, and the Collateral Trustee shall be
entitled to the rights and protections of the Collateral Trust Agreement..
SECTION 8.2. Costs and Expenses. (a) The Loan Parties
agree to pay on demand (i) to the Debt Coordinators, the Administrative
Agent, the Lead Arrangers and the Collateral Trustee all reasonable costs
and expenses, including, without limitation, the reasonable costs and
expenses of their counsel and of any experts and agents, that the Debt
Coordinators, the Administrative Agent, the Lead Arrangers and the
Collateral Trustee may incur in connection with (A) the administration of
this Agreement and the other Loan Documents, (B) the exercise or
enforcement of any rights of the Debt Coordinators, the Administrative
Agent, the Collateral Trustee or the Lender Parties hereunder or under any
of the other Loan Documents or (C) the failure of any Loan Party to perform
or observe any of the provisions hereof and (ii) to the Debt Coordinators,
the Administrative Agent, the Lead Arrangers, the Collateral Trustee and
each Lender Party all costs and expenses, including, without limitation,
the costs and expenses of their counsel and of any experts and agents, that
the Debt Coordinators, the Administrative Agent, the Lead Arrangers, the
Collateral Trustee and each Lender Party may incur after the commencement
of any bankruptcy, insolvency or similar proceeding affecting creditors'
rights generally in connection with the administration of this Agreement
and the other Loan Documents or the exercise or enforcement of any rights.
(b) The Loan Parties agree to indemnify and hold harmless
each Debt Coordinator, the Administrative Agent, the Collateral Trustee,
the Lender Parties and, in each case, each of their Affiliates and their
respective officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection
with or by reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in
connection therewith) this Agreement (including, without limitation,
enforcement of this Agreement), except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by
a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. Without prejudice to the
survival of any other agreement of any Loan Party hereunder or under any
other Loan Document, the agreements and obligations of the Loan Parties
contained in this Section 8.2 shall survive the payment in full of all
amounts payable under the Covered Facilities or any of the Loan Documents.
Article IX
MISCELLANEOUS
SECTION 9.1. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing and sent as
specified in Section 8.1 of the Intercreditor Agreement.
SECTION 9.2. Amendments. No amendment or waiver of any
provision of this Agreement, nor consent to any departure therefrom by any
party hereto, shall in any event be effective unless the same shall be in
writing and otherwise in compliance with the provisions specified in
Section 2.2 of the Intercreditor Agreement.
SECTION 9.3. No Waiver; Remedies. No failure on the part
of the Debt Coordinators, the Administrative Agent or the Collateral
Trustee to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 9.4. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute
one and the same agreement. Manual delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as
delivery of an original executed counterpart of this Agreement.
SECTION 9.5. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Loan Parties, the Debt
Coordinators, the Administrative Agent and the Collateral Trustee and
thereafter shall be binding upon and inure to the benefit of the Loan
Parties, the Debt Coordinators, the Administrative Agent and the Collateral
Trustee and their respective successors and assigns, except that no Loan
Party shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Debt Coordinators.
SECTION 9.6. Jurisdiction; Process Agent; Judgment
Currency; Waiver of Immunities; Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it
is a party or any of the Covered Documents, or for recognition or
enforcement of any judgment (other than, in any case, with respect to any
foreclosure or other enforcement action with respect to or in any way
related to the Collateral which is reasonably determined by the Debt
Coordinators to be advisable to be brought in a court of local
jurisdiction), and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or,
to the extent permitted by law, in such Federal court (or, in such local
court, as aforesaid). Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it
is a party in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each Loan Party which is a Foreign Subsidiary hereby
irrevocably and unconditionally appoints Corporation Service Company with
an office on the date hereof at ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ and its successors hereunder (the "Process Agent"), as its
agent to receive on behalf of such Loan Party and its property service of
copies of the summons and complaint and any other process which may be
served in any such suit, action or proceeding brought in any New York State
court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof. Such service may be made by
mailing or delivering a copy of such process to Group in care of the
Process Agent at the address specified above for the Process Agent, and
each such Loan Party hereby irrevocably authorizes and directs the Process
Agent to accept such service on its behalf. Each such Loan Party further
consents to service of process which may be served in any action or suit
brought in any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any
thereof, by mailing copies thereof by registered or certified mail, postage
prepaid, to such Loan Party at its address for notice hereunder, such
service to become effective 30 days after mailing. Failure of the Process
Agent to give notice to any such Loan Party or failure of any such Loan
Party to receive notice of such service of process shall not affect in any
way the validity of such service on the Process Agent or such Loan Parties.
Each Loan Party which is a Foreign Subsidiary covenants and agrees that it
shall take any and all reasonable action, including the execution and
filing of any and all documents, that may be necessary to continue the
designation of the Process Agent above in full force and effect, and to
cause the Process Agent to act as such. In the event that at any time such
Process Agent shall for any reason cease to maintain an office in the
Borough of Manhattan in New York City, or cease to act as Process Agent,
then as an alternate method of service, each such Loan Party irrevocably
consents to the service of any and all process in any such suit, action or
proceeding in any New York State court or Federal court of the United
States of America sitting in New York City, and any appellate court from
any thereof, by mailing of copies of such process to such Loan Party at its
address specified in Section 8.1 of the Intercreditor Agreement. Each such
Loan Party acknowledges and agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or
shall limit the right to ▇▇▇ in any other jurisdiction.
(d) If for the purpose of obtaining judgment in any court
it is necessary to convert a sum due hereunder to any party hereunder in
one currency into another currency, the parties hereto agree, to the
fullest extent permitted by law, that the rate of exchange used shall be
that at which in accordance with normal banking procedures such party could
purchase the first currency with such other currency in New York City on
the day which is at least two Business Days prior to the day on which final
judgment is rendered.
(e) To the fullest extent permitted by law, the
obligation of any party in respect of any sum payable hereunder by it to
any other party hereunder shall, notwithstanding any judgment in a currency
(the "Judgment Currency") other than Dollars (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by
such other party of any sum adjudged to be so due in the Judgment Currency
such other party may in accordance with normal banking procedures purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency which could have been so purchased is less than the sum
originally due to such other party in the Agreement Currency, such first
party agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such other party against such loss, and, if the
amount of the Agreement Currency which could have been so purchased exceeds
the sum originally due to such other party, such other party agrees to
remit to such first party such excess.
(f) To the extent that any of the parties hereto has or
hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, form jurisdiction of any court or from set-off
or any legal process (whether service or notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution or judgment
or otherwise) with respect to itself or any of its property each of the
parties hereto hereby irrevocably waives and agrees not to plead or claim
such immunity in respect of its obligations under this Agreement and the
other Loan Documents. Each of the parties hereto agrees that the waivers
set forth above shall have the fullest extent permitted under the Foreign
Sovereign Immunities Act of the United States of America and are intended
to be irrevocable and not subject to withdrawal for purposes of such act.
SECTION 9.7. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 9.8. Waiver of Jury Trial. Each of the parties
hereto irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or any of the Loan Documents
or the actions of the Debt Coordinators, the Administrative Agent or the
Collateral Trustee or any Lender Party in the negotiation, administration,
performance or enforcement hereof or thereof.
SECTION 9.9. Appointment and Acknowledgment. Each
Subsidiary of Group which is a party hereto hereby (i) irrevocably appoints
Group as its representative in connection with the entering into of the
Intercreditor Agreement, and agrees to be bound by the terms and provisions
of the Intercreditor Agreement as though it had been a signatory thereto
and (ii) acknowledges that Group will, concurrently with the execution and
delivery of this Agreement, execute and deliver the Intercreditor Agreement
in its individual capacity and as representative of each such Subsidiary.
SECTION 9.10. Conflict with Other Agreements. In the
event of any conflict between this Agreement (or any portion thereof) and
any Collateral Document now existing or hereafter entered into (excluding
the Collateral Trust Agreement), the terms of this Agreement shall prevail.
In the event of any conflict between this Agreement (or any portion
thereof) and the Collateral Trust Agreement, the terms of the Collateral
Trust Agreement shall prevail.
SECTION 9.11. Foreign Subsidiary Collateral Limitation.
Notwithstanding any provision of any Loan Document to the contrary, (i) no
more than 66% of the Equity Interests in or of any Foreign Subsidiary shall
be pledged or similarly hypothecated to guaranty or support any Obligation
of any U.S. Credit Party, (ii) no Foreign Subsidiary shall guaranty or
otherwise support any Obligation of any U.S. Credit Party and (iii) no
security or similar interest in the assets of any Foreign Subsidiary (other
than not more than 66% of the Equity Interests in or of any Foreign
Subsidiary) shall guarantee or support any Obligation of any U.S. Credit
Party. The parties agree that any pledge, guaranty or security or similar
interest made or granted in contravention of this Section 9.11 shall be
void ab initio.
[remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
THE BANK OF NOVA SCOITIA,
as Administrative Agent
and Debt Coordinator
By: /s/
----------------------
Title:
CITIBANK, N.A.,
as Debt Coordinator
By: /s/
----------------------
Title:
STATE STREET BANK AND
TRUST COMPANY,
as Collateral Trustee
By: /s/
----------------------
Title:
CITICORP USA, INC.
By: /s/
----------------------
Title:
THE WARNACO GROUP, INC.
By: /s/
----------------------
Title:
WARNACO INC.
By: /s/
----------------------
Title:
DESIGNER HOLDINGS LTD.
By: /s/
----------------------
Title:
OUTLET STORES, INC.
By: /s/
----------------------
Title:
OUTLET HOLDINGS, INC.
By: /s/
----------------------
Title:
RIO SPORTSWEAR, INC.
By: /s/
----------------------
Title:
AEI MANAGEMENT CORPORATION
By: /s/
----------------------
Title:
JEANSWEAR HOLDINGS, INC.
By: /s/
----------------------
Title:
▇▇▇▇▇▇ ▇▇▇▇▇ JEANSWEAR COMPANY
By: /s/
----------------------
Title:
CKJ HOLDINGS, INC.
By: /s/
----------------------
Title:
CKJ SOURCING ,INC.
By: /s/
----------------------
Title:
ABBEVILLE MANUFACTURING COMPANY
By: /s/
----------------------
Title:
KAI JAY MANUFACTURING COMPANY
By: /s/
----------------------
Title:
NEW BEDFORD SHIPPERS CORP.
By: /s/
----------------------
Title:
MYRTLE AVENUE, INC.
By: /s/
----------------------
Title:
▇▇▇▇▇▇▇ STREET INC.
By: /s/
----------------------
Title:
WARNACO U.S., INC.
By: /s/
----------------------
Title:
WARNACO MEN'S SPORTSWEAR INC.
By: /s/
----------------------
Title:
▇.▇. ▇▇▇▇▇▇▇▇ COMPANY
By: /s/
----------------------
Title:
PENHALIGON'S BY REQUEST, INC.
By: /s/
----------------------
Title:
WARNACO VENTURES LTD.
By: /s/
----------------------
Title:
VENTURES LTD.
By: /s/
----------------------
Title:
A.B.S. CLOTHING COLLECTION, INC.
By: /s/
----------------------
Title:
WARNACO INTERNATIONAL, L.L.C.
By: /s/
----------------------
Title:
▇▇▇▇▇▇▇ INC.
By: /s/
----------------------
Title:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/
----------------------
Title:
WARNACO INTERNATIONAL INC.
By: /s/
----------------------
Title:
WARMANA LIMITED
By: /s/
----------------------
Title:
WARNACO SOURCING INC.
By: /s/
----------------------
Title:
WARNER'S DE COSTA RICA INC.
By: /s/
----------------------
Title:
AUTHENTIC FITNESS CORPORATION
By: /s/
----------------------
Title:
AUTHENTIC FITNESS PRODUCTS INC.
By: /s/
----------------------
Title:
AUTHENTIC FITNESS RETAIL INC.
By: /s/
----------------------
Title:
AUTHENTIC FITNESS ON-LINE INC.
By: /s/
----------------------
Title:
CCC ACQUISITION CORP.
By: /s/
----------------------
Title:
CCC ACQUISITION REALTY CORP.
By: /s/
----------------------
Title:
UBERTECH PRODUCTS INC.
By: /s/
----------------------
Title:
WARNACO PUERTO RICO, INC.
By: /s/
----------------------
Title:
WARNER'S (UNITED KINGDOM) LTD.
By: /s/
----------------------
Title:
WARNER'S (EIRE) TEORANTA
By: /s/
----------------------
Title:
PENHALIGON'S LIMITED
By: /s/
----------------------
Title:
PENHALIGON'S & JEAVONS INVESTMENT
COMPANY LIMITED
By: /s/
----------------------
Title:
AUTHENTIC FITNESS OF CANADA INC.
By: /s/
----------------------
Title:
WARNACO OF CANADA COMPANY
By: /s/
----------------------
Title:
WARNACO LAC ONE GmbH
By: /s/
----------------------
Title:
WARNACO LAC TWO GmbH
By: /s/
----------------------
Title:
ERATEX-WARNACO LAC TWO
GmbH & CO. KG
By: /s/
----------------------
Title:
WARNER'S AIGLON S.A.
By: /s/
----------------------
Title:
▇▇▇▇▇▇ ▇▇▇▇▇ FRANCE SA
By: /s/
----------------------
Title:
WARNACO FRANCE SARL
By: /s/
----------------------
Title:
PMJ S.A.
By: /s/
----------------------
Title:
IZKA S.C.
By: /s/
----------------------
Title:
LEJABY S.A.S
By: /s/
----------------------
Title:
EURALIS S.A.S.
By: /s/
----------------------
Title:
WARNACO B.V.
By: /s/
----------------------
Title:
WARNACO HOLLAND B.V.
By: /s/
----------------------
Title:
WARNACO NETHERLANDS B.V.
By: /s/
----------------------
Title:
WARNER'S COMPANY (BELGIUM) S.A.
By: /s/
----------------------
Title:
DONATEX WARNACO S.A.
By: /s/
----------------------
Title:
LINTEX-WARNACO S.A.
By: /s/
----------------------
Title:
LENITEX-WARNACO
HANDELSGESELLSCHAST m.b.H.
By: /s/
----------------------
Title:
WARNACO S.r.l.
By: /s/
----------------------
Title:
WARNACO (HK) LTD.
By: /s/
----------------------
Title:
ANNEX A
COMMON TERMS AND RULES OF CONSTRUCTION
FOR THE LOAN DOCUMENTS
PART I. DEFINITIONS
"Administrative Agent" has the meaning specified in the preamble
to the Intercreditor Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with The Bank
of Nova Scotia at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Account No. 6136-30, Reference: Warnaco Account, or such other
account as the Administrative Agent shall specify in writing to the Debt
Coordinators and Group.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, control
of a Person shall include the power, direct or indirect, (a) to vote 10% or
more of the securities or other interests having ordinary voting power for
the election of directors or other managing Persons of such Person or (b)
to direct or cause direction of the management and policies of such Person
whether by contract or otherwise.
"Agents" means each of the Lead Arrangers, the Arrangers, the Debt
Coordinators, the Collateral Trustee, the Security Agent and the
Administrative Agent, together, in each case, with any successor or
successors of any thereof appointed pursuant to Article VI of the
Intercreditor Agreement.
"Agreement Value" means, (A) for each Hedge Agreement (other than
the Equity Derivatives), on any date of determination, an amount determined
by the Debt Coordinators equal to: (a) in the case of a Hedge Agreement
documented pursuant to the Master Agreement (Multicurrency-Cross Border)
published by the International Swap and Derivatives Association, Inc. (the
"Master Agreement"), the amount, if any, that would be payable by any Loan
Party or any of its Subsidiaries to its counterparty to such Hedge
Agreement, as if (i) such Hedge Agreement was being terminated early on
such date of determination, (ii) such Loan Party or Subsidiary was the sole
"Affected Party", and (iii) the Debt Coordinators were the sole parties
determining such payment amount (with the Debt Coordinators making such
determination pursuant to the provisions of the form of Master Agreement);
or (b) in the case of a Hedge Agreement traded on an exchange, the
▇▇▇▇-to-market value of such Hedge Agreement, which will be the unrealized
loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan
Party party to such Hedge Agreement determined by the Debt Coordinators
based on the settlement price of such Hedge Agreement on such date of
determination, or (c) in all other cases, the ▇▇▇▇-to-market value of such
Hedge Agreement, which will be the unrealized loss on such Hedge Agreement
to the Loan Party or Subsidiary of a Loan Party party to such Hedge
Agreement reasonably determined by the Debt Coordinators as the amount, if
any, by which (i) the present value of the future cash flows to be paid by
such Loan Party or Subsidiary exceeds (ii) the present value of the future
cash flows to be received by such Loan Party or Subsidiary pursuant to such
Hedge Agreement; capitalized terms used and not otherwise defined in this
definition shall have the respective meanings set forth in the above
described Master Agreement and (B) with respect to each Equity Derivative,
on any date of determination, an amount determined by the Debt Coordinators
to be the total commitment under such Equity Derivative, which shall be
equal to the sum of (a) the aggregate principal amount of each Equity
Derivative Note on such date plus (b) the Forward Price (as defined in the
Equity Forward Agreement for such Equity Derivative on the Effective Date)
on such date multiplied by the number of shares of Group stock subject to
such Equity Derivative.
"Approved Accounting Firm" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Deloitte &
Touche LLP, Ernst & Young LLP, PricewaterhouseCoopers LLP or KPMG Peat
Marwick LLP, or any successor thereof.
"Arrangers" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Authorized Officer" means the Chairman of the Board, the Chief
Financial Officer, the General Counsel, the Secretary or the Treasurer of a
Person or any other officer designated as an "Authorized Officer" by the
Board of Directors (or equivalent governing body) of such Person.
"Bankruptcy Event" has the meaning specified in Section 5.1 of the
Facility Agreement.
"Bridge Facility" has the meaning specified on Schedule II to the
Intercreditor Agreement.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any eurodollar rate credit extensions,
on which dealings are carried on in the London interbank market.
"Capital Expenditures" for any period means all capital
expenditures made by Group and its Subsidiaries during such period in
accordance with GAAP, excluding (i) capital expenditures funded directly or
indirectly with the proceeds of insurance or condemnation proceeds (to the
extent of such insurance or condemnation proceeds received) and made to
replace or repair the assets which are the subject of such casualty or
condemnation, (ii) capital expenditures funded directly or indirectly with
the Net Cash Proceeds of asset sales as described in clause (iv) of the
definition of Net Cash Proceeds, (iii) capital expenditures consisting of
like-kind exchanges not exceeding $5,000,000 in the aggregate and made in
the ordinary course of business consistent with prior practice, (iv) in the
case where actual Capital Expenditures (including any Specified Sale
Leaseback Transactions) in any period of four consecutive Fiscal Quarters
are equal to or exceed the sum of $30,000,000 plus projected Capital
Expenditures for such period as specified in Schedule I to the Facility
Agreement ("Projected CapEx"), an amount equal to: $30,000,000 less the
actual dollar amount of Specified Sale Leaseback Transactions in such
period; provided that such amount in this clause (iv) shall at no time
exceed $30,000,000 and (v) in the case where actual Capital Expenditures
(including any Specified Sale Leaseback Transactions) in any period of four
consecutive Fiscal Quarters are less than the sum of $30,000,000 plus
Projected CapEx, an amount (but not less than zero) equal to: $30,000,000
less the actual dollar amount of Specified Sale Leaseback Transactions in
such period less an amount equal to (i) Projected CapEx plus $30,000,000
less (ii) actual Capital Expenditures (including any Specified Sale
Leaseback Transactions) in such period.
"Capitalized Leases" has the meaning specified in clause (e) of
the definition of "Debt".
"Cash Equivalents" means any of the following, to the extent owned
by Group or any of its Subsidiaries free and clear of all Liens other than
Liens created under the Collateral Documents and having a maturity of not
greater than 180 days from the date of issuance thereof: (a) readily
marketable direct obligations of the Government of the United States or any
agency (including, without limitation, the Federal Home Loan Mortgage
Association, the Federal Home Loan Bank, the Federal National Mortgage
Association and the Governmental National Mortgage Association) or
instrumentality thereof or obligations unconditionally guaranteed by the
full faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that
is a Lender Party or a member of the Federal Reserve System, which issues
(or the parent of which issues) commercial paper rated at least "Prime-1"
(or the then equivalent grade) by ▇▇▇▇▇'▇ or "A-1" (or the then equivalent
grade) by S&P, is organized under the laws of the United States or any
State thereof and has combined capital and surplus of at least $1 billion,
(c) repurchase agreements entered into by any Person with a bank or trust
company (including any of the Lender Parties) or recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States in which
such Person shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a
fair market value of at least 100% of the amount of the repurchase
obligations or (d) Investments, classified in accordance with GAAP as
current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by
reputable financial institutions having capital of at least $500,000,000
and the portfolios of which are limited only to Investments of the
character described in the foregoing clauses (a) through (c).
"Cash Management Bank" has the meaning specified in the definition
of "Cash Management Services".
"Cash Management Register" has the meaning specified in Section
8.4(c) of the Intercreditor Agreement.
"Cash Management Services" means daylight overdraft facilities or
similar cash management accounts entered into by any Warnaco Entity with
any financial institution in the ordinary course of business in an amount
not to exceed $20,000,000 in an aggregate amount outstanding at any time
for all such financial institutions; provided that Group and each
respective financial institution party to such facility or maintaining such
account ( a "Cash Management Bank") shall provide written notice to the
Collateral Trustee of the existence and maximum amount of such facility or
account for recordation in the Cash Management Register as provided in
Section 8.4(c) of the Intercreditor Agreement, and provided further that
each such facility or account shall be deemed to remain in place for
purposes of compliance with the $20,000,000 aggregate amount specified
above until written notice of the termination of such facility or account
is delivered to the Collateral Trustee by Group and such Cash Management
Bank, at which time the Collateral Trustee will delete such facility or
account from the Cash Management Register.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"Citibank" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means all "Collateral" referred to in the Collateral
Documents (and any Covered Facility, as applicable) and all other property
that is or is intended to be subject to any Lien in favor of the Collateral
Trustee for the benefit of the Secured Parties.
"Collateral Account" has the meaning specified in the Security
Agreement.
"Collateral Documents" means, collectively, the Security
Agreement, the Subsidiary Guaranty, the Parent Guaranty, each Mortgage, the
Leasehold Assignments, the Intellectual Property Security Agreement, the
Collateral Trust Agreement, the Foreign Collateral Documents, each of the
collateral documents, instruments and agreements delivered pursuant to
Section 2.5(k) and 2.14 of the Facility Agreement and each other agreement
that creates or purports to create a Lien in favor of the Collateral
Trustee for the benefit of the Secured Parties.
"Collateral Trust Agreement" has the meaning specified in Section
6.1(a)(vii) hereto.
"Collateral Trustee" has the meaning specified in the preamble to
the Intercreditor Agreement.
"Commerzbank" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Contingent Obligation" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, (a)
the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the Obligation of a
primary obligor, (b) the Obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any Obligation of such Person, whether or
not contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation
or (B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder),
as determined by such Person in good faith.
"Continuing Directors" means, as of any date, collectively, all
members of the Board of Directors of Group (i) on the Effective Date and
(ii) whose appointment or nomination for election was approved by a vote of
at least 50% of the Continuing Directors in office immediately prior to
such appointment or nomination.
"Covered Documents" means, collectively, all of the agreements,
instruments and documents evidencing the terms of the Covered Facilities,
in each case as in effect from time to time.
"Covered Facilities" means the Existing Facilities and the New
Facilities.
"Credit Party" means any U.S. Credit Party and any Foreign Credit
Party.
"Debt" of any Person means, without duplication, the following:
(a) all indebtedness for borrowed money,
(b) all Obligations of such Person for the deferred purchase
price of property or services (other than (1) Obligations of the type specified
in Section 2.6(b)(vi), (vii), (viii), (ix), (x) and (xi) of the Facility
Agreement, (2) trade payables not overdue by more than 90 days incurred in
the ordinary course of such Person's business and (3) trade payables
incurred in the ordinary course of such Person's business which are overdue
by more than 90 days, (A) which are being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained in accordance with GAAP and (B) as to which there shall be any
period of 10 consecutive days during which a stay of any enforcement,
collection, execution, levy or foreclosure proceedings, if commenced, shall
not be in effect), including, without limitation, the Trade Credit
Facility,
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments,
(d) all Obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property),
(e) all Obligations of such Person as lessee under leases
that have been or should be, in accordance with GAAP, recorded as capital
leases ("Capitalized Leases"),
(f) all Obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in
such Person or any other Person or any warrants, rights or options to
acquire such Equity Interests, valued, in the case of Redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends,
(h) all Obligations of such Person in respect of Hedge
Agreements,
(i) all Contingent Obligations of such Person, and
(j) all Debt referred to in clauses (a) through (i) above
of another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"Debt Coordinators" has the meaning specified in the preamble to
the Intercreditor Agreement
"Debt Rating" means, as of any date, the ratings that have been
most recently announced by S&P and ▇▇▇▇▇'▇ for any class of non-credit
enhanced long-term senior unsecured debt issued by Group in effect on such
date, provided that if such ratings are (i) both "investment grade" (BBB-
or Baa3 or higher) but shall fall within different levels, the higher of
such ratings shall apply or (ii) either or both below "investment grade"
but shall fall within different levels, the lower of such ratings shall
apply (except that if the ratings specified in Level 4 of the pricing grids
in Section 2.4 are in effect, the pricing specified for Level 4 in such
grids shall apply); provided further that if neither S&P nor ▇▇▇▇▇'▇ shall
have in effect such a rating, the pricing specified in Level 7 of the
pricing grids in Section 2.4 shall apply. For purposes of the foregoing, if
(a) only one of S&P and ▇▇▇▇▇'▇ shall have in effect a Debt Rating, the
pricing specified in the pricing grids in Section 2.4 shall be determined
by reference to the available rating; (b) any rating established by S&P or
▇▇▇▇▇'▇ shall be changed, such change shall be effective as of the date on
which such change is reported to Group; and (c) S&P or ▇▇▇▇▇'▇ shall change
the basis on which ratings are established, each reference above to the
Debt Rating announced by S&P or ▇▇▇▇▇'▇, as the case may be, shall refer to
the then equivalent rating by S&P or ▇▇▇▇▇'▇, as the case may be.
"Debt Termination Date" means the date on which (i) all loans or
other credit extensions and all outstanding reimbursement obligations in
respect of letters of credit and bankers' acceptances under all Covered
Facilities have been paid in full, (ii) all commitments to lend or issue
any letter of credit or bankers' acceptance or provide any other credit
extension under any Covered Facility have been terminated, and (iii) all
letters of credit and bankers' acceptances under any Covered Facility shall
have either been cancelled or cash collateralized or covered by a back-up
letter of credit in a manner satisfactory to the issuing bank thereof.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time under a Covered Facility, the portion of any loan, letter of credit,
bankers' acceptance or other credit extension required to be made by such
Lender Party to or for the account of a Loan Party under such Covered
Facility at or prior to such time that has not been made by such Lender
Party or by any agent or representative for the account of such Lender
Party as of such time.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to any agent or
other representative of such Lender Party or made available (including in
respect of any letter of credit or bankers' acceptance) to or for the
account of any Loan Party or to any other Lender Party hereunder or under
any other Loan Document or Covered Facility at or prior to such time that
has not been so paid as of such time.
"Defaulted Facility" has the meaning specified in Section 2.3 of
the Intercreditor Agreement.
"Defaulting Lender" means, at any time, any Lender Party that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 5.1(f) of the Facility Agreement.
"Derivative Agreements" means, collectively, the Secured Hedge
Agreements and the Equity Derivatives.
"Designated Capital Markets Transaction" means the (a) incurrence
or issuance by any Loan Party or any of its Subsidiaries of any Debt other
than Debt which is secured on a pari passu basis with the Covered
Facilities and/or (b) sale or issuance by any Loan Party or any of its
Subsidiaries of any Equity Interests (other than the issuance by Group of
options or stock to officers or employees of Group); in either case in a
public or private transaction.
"DHL Convertible Debentures" means the 6% Convertible Subordinated
Debentures Due 2016 issued under the November 6, 1996 Indenture between
Designer Holdings Ltd. and IBJ ▇▇▇▇▇▇▇▇▇ Bank & Trust Company.
"Dollars" and "$" means lawful money of the United States.
"Domestic Subsidiary Guaranty" means a guaranty substantially in
the form of Exhibit C hereto.
"Domestic Subsidiary Guaranty Supplement" means the guaranty
supplement in substantially the form attached to the Domestic Subsidiary
Guaranty.
"Domestic Subsidiary" means any direct or indirect Subsidiary of
Group incorporated or formed under the laws of a state of the United States
or any territory thereof.
"EBITDA" means, for any period, net income (or net loss) from
operations, determined (i) without giving effect to (A) non-cash
extraordinary and non-recurring gains or losses, (B) gains or losses
resulting from the sale of any asset for proceeds of $500,000 or more or
(C) all cash extraordinary or non-recurring (1) employee severance and
benefit costs, (2) costs arising from the permanent closing or realignment
of any owned or leased real property locations, (3) costs arising from the
early termination of any leases or other contracts and (4) legal and other
administrative and other related costs incurred in connection with the
foregoing clauses (1) through (3); provided that no more than an aggregate
amount of $50,000,000 may be included in EBITDA until the Termination Date
pursuant to this clause (C) and (ii) with giving effect to the
non-recurring gain realized from the sale of equity interests of Interworld
Corporation; plus, to the extent deducted in calculating such net income
(loss), the sum of (a) Interest Expense, (b) income tax expense, (c)
depreciation expense, (d) amortization expense and (e) restructuring
charges taken through the Fiscal Quarter ended July 1, 2000; in each case
determined in accordance with GAAP.
"Effective Date" has the meaning specified in Section 4.1 of the
Intercreditor Agreement.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental
or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or judicially enforceable agency
interpretation, policy or guidance relating to pollution or protection of
the environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Equity Derivative Note" means each Modification Note and each
Subsequent Note referred to in items B.18 and B.19 on Schedule II of the
Intercreditor Agreement.
"Equity Derivatives" means, collectively, items B.18 and B.19 on
Schedule II of the Intercreditor Agreement, in each case as amended,
modified or otherwise supplemented to the date hereof.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase
or other acquisition from such Person of such shares (or such other
interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are authorized or otherwise
existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV
of ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA
apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected
to occur with respect to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of any Loan Party
or any ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, such Plan.
"Events of Default" has the meaning specified in Section 5.1 of
the Facility Agreement.
"Excluded Foreign Subsidiary" means a direct or indirect Foreign
Subsidiary of Group which is not a Foreign Credit Party.
"Excluded Intellectual Property" means those items of intellectual
property specified on Schedule 2.6(d)(vi) of the Facility Agreement.
"Excluded Person" means (i) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or (ii) any trust of
which ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is the sole trustee or is a trustee with effective
control over the voting stock held by such trust or over the management or
policies of Group (or, in case of her death or disability, another trustee
of comparable experience and ability selected by Group within 180 days
thereafter after consultation with the Debt Coordinators).
"Excluded Property" means (i) any owned real property that is not
Material Real Property, (ii) any leased real property that is not Material
Leased Property, (iii) any registration of intellectual property in a
jurisdiction other than the United States and Included Foreign
Jurisdictions, (iv) general intangibles or other rights arising under
contracts as to which the grant of a security interest therein would
constitute a violation of a valid and enforceable restriction on such
grant, unless and until any required consents shall have been obtained or
such restrictions are rendered ineffective as a matter of law (at which
time the Collateral will include such General Intangibles and other rights
automatically and without any further action by any Grantor, the Collateral
Trustee or any other Person), but all proceeds of any such contracts (and
the right to receive future proceeds) shall not be "Excluded Property", (v)
property subject to purchase money financing and Capitalized Leases
permitted under Section 2.6(b)(iii), (iv) and (xiv) of the Facility
Agreement, (vi) interests in the Trust Stock and any shares of Designer
Holdings Ltd. into which such interests are converted pursuant to the TOPRs
Documents and (vii) all accounts receivable and related property sold under
the Securitization Facility.
"Existing Facilities" means each of the credit facilities listed
on Schedule II of the Intercreditor Agreement.
"Extending Facilities" means the Existing Facilities identified in
Schedule II to the Intercreditor Agreement under the heading "Extending
Facilities".
"Extraordinary Receipt" means any cash received by or paid to or
for the account of any Person not in the ordinary course of business,
including, without limitation, each tax refund in excess of $100,000
(provided that 10% of each tax refund in excess of $100,000 received at any
time by Group shall not constitute "Extraordinary Receipts"), pension plan
reversions, judgment and settlement awards (other than any amounts received
as compensation for actual economic losses) in each case in excess of
$100,000, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation
for lost earnings), condemnation awards (and payments in lieu thereof),
indemnity payments (other than any amounts received as compensation for
actual economic losses) in each case in excess of $100,000 and any purchase
price adjustment in excess of an aggregate of $1,000,000 per Fiscal Year
received in connection with any purchase agreement; provided that an
Extraordinary Receipt shall not include cash receipts received from
proceeds of insurance or condemnation awards (or payments in lieu thereof)
(i) of less than $1,000,000 in respect of any single casualty event, (ii)
in respect of loss or damage to equipment, fixed assets, inventory or real
property which are applied (or in respect of which expenditures were
previously incurred) to replace or repair the equipment, fixed assets,
inventory or real property in respect of which such proceeds were received,
so long as such application, or a contractual commitment to apply such
funds or replace such property, is made no later than 60 days after the
receipt by such Person of such funds (provided that the Debt Coordinators
may extend the 60 day time period specified in this clause (ii) by up to an
additional 45 days if requested by Group) or (iii) received by any Person
in respect of any third party claim against such Person and applied within
a reasonable period of time to pay (or to reimburse such Person for its
prior payment of) such claim.
"Facility Agreement" has the meaning specified in Section
4.1(a)(ii) of the Intercreditor Agreement.
"Fiscal Quarter" means a fiscal quarter of Group and its
Consolidated Subsidiaries ending on or about March 31, June 30, September
30 and December 31 of each year.
"Fiscal Year" means a fiscal year of Group and its Consolidated
Subsidiaries ending on or about December 31 of each year.
"Fixed Charge Coverage Ratio" means, for any period of four
consecutive Fiscal Quarters, on a Consolidated basis, the ratio of (a) an
amount equal to EBITDA of Group and its Subsidiaries for such period, less
the aggregate of all Capital Expenditures made by Group and its
Subsidiaries during such period to (b) the sum of (i) all cash Interest
Expense of Group and its Subsidiaries paid or accrued during such period,
(ii) all cash taxes paid by Group and its Subsidiaries for such period (net
of tax refunds received in such period), (iii) all principal amortization
payments made by Group and its Subsidiaries for such period and (iv) all
cash dividends paid by Group for such period in respect of Designated
Capital Markets Transactions.
"Foreign Collateral Documents" means, collectively, all documents,
instruments and agreements specified on Schedule IV to the Facility
Agreement, each of the collateral documents, instruments and agreements
delivered pursuant to Section 2.5(k) and 2.14 of the Facility Agreement and
each other agreement that creates or purports to create a Lien on property
or assets of the Foreign Credit Parties in favor of the Collateral Trustee
for the benefit of the Secured Parties or grants or purports to grant a
power of attorney to any Person for purposes of creating such a Lien.
"Foreign Credit Party" means any Foreign Subsidiary organized
under the laws of any Included Foreign Jurisdiction, or that is an Included
Foreign Subsidiary. Unless otherwise expressly provided, a Subsidiary which
either (i) is classified as inactive or dormant (or other similar
designation) under the applicable laws of any Included Foreign Jurisdiction
or (ii) has assets with an aggregate fair market value of less than
$150,000 shall not be considered a "Foreign Credit Party" for purposes of
this definition.
"Foreign Facilities" means, collectively, items A.3, B.2 through
B.4, B.9 and B.17 on Schedule II of the Intercreditor Agreement.
"Foreign Subsidiary" means a direct or indirect Subsidiary of
Group which is not a Domestic Subsidiary.
"Fully Satisfied" means, with respect to the Payment Obligations
as of any date, that, on or before such date, (a) the principal of (or, as
applicable, stated or face amount of) and interest accrued to such date on
all outstanding loans, reimbursement obligations in respect of letters of
credit and bankers' acceptances and other credit extensions shall have been
paid in full in cash, (b) all commitments to lend, issue any letter of
credit, bankers' acceptance or other credit extension shall have been
terminated in full, (c) all outstanding letters of credit and bankers'
acceptances shall have been (i) terminated or (ii) cash collateralized by
an amount sufficient in the reasonable judgment of the Debt Coordinators to
secure any claims thereunder or (iii) supported by one or more letters of
credit or other instruments on terms and conditions, and with one or more
financial institutions, reasonably satisfactory to the Debt Coordinators
and (d) all fees, expenses and other amounts then due and payable which
constitute Payment Obligations shall have been paid in full in cash;
provided, however, that on such date none of the Agents or any Lender Party
shall have made any other claims in respect of Payment Obligations against
any Loan Party under any provision of any of the Loan Documents or Covered
Facilities that has not been cash collateralized by an amount sufficient in
the reasonable judgment of the Debt Coordinators and any such Lender Party
to secure such claim.
"GAAP" has the meaning specified in Section 1.2 of the
Intercreditor Agreement.
"Group" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency forward or option contracts and other hedging
agreements.
"Hedge Bank" means any Lender Party or an Affiliate of a Lender
Party in its capacity as a party to a Secured Hedge Agreement.
"Immaterial Subsidiary" means, as of any date of determination,
any direct or indirect Subsidiary of Group that (i) does not hold any
material trademarks or other intellectual property and (ii) on a
Consolidated basis with its Subsidiaries (A) has assets with an aggregate
fair market value of less than $1,000,000 or (B) had revenues of less than
$1,000,000 during the past 12-month period.
"Included Foreign Jurisdictions" means Canada, Germany, France,
the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ and
Barbados, and each other jurisdiction of organization, if any, of the
Included Foreign Subsidiaries.
"Included Foreign Subsidiary" means any Foreign Subsidiary not
otherwise an existing Foreign Credit Party, and which has, as of any date
of determination on a Consolidated basis with its Subsidiaries, as
calculated in accordance with GAAP, (i) EBITDA for the last four Fiscal
Quarters of at least $5,000,000 or (ii) total assets as of the last day of
the most recently ended Fiscal Quarter of at least $20,000,000.
"Indebtedness for Borrowed Money" of any Person means all Debt of
such Person for borrowed money or evidenced by notes, bonds, debentures or
other similar instruments (other than Trust Stock and DHL Convertible
Debentures, both as in effect on the Effective Date), all Obligations of
such Person for the deferred purchase price of any property, service or
business (other than trade accounts payable incurred in the ordinary course
of business and constituting current liabilities, but including all loans
in excess of $350,000,000 under the Trade Credit Facility and under the New
Trade Credit Facility), and all Obligations of such Person under
Capitalized Leases (limited in each case to the principal amount thereof);
provided that Indebtedness for Borrowed Money (i) shall exclude (A)
Specified Debt and (B) all amounts under any Securitization Facility that
are classified, in accordance with GAAP, as credit extensions from the
receivables servicer rather than purchases of accounts receivable, as
resulting from any modification of the securitization structure in effect
as of the Effective Date, as such modification is made and agreed to from
time to time by the applicable servicer, Group and the Debt Coordinators
and (ii) on any testing date shall be (A) decreased (increased) by the
amount which "Total Outstanding Capital" (or similar term) under and as
defined in the Securitization Facility is less (more) than the projected
outstanding amount under the Securitization Facility for such time as
specified in Schedule II to the Facility Agreement, provided that such
amount in this clause (ii) shall not exceed $25,000,000 unless, and only to
the extent, such increase (decrease) is due to a change in the structure of
the Securitization Facility.
"Intellectual Property Security Agreement" has the meaning
specified in Section 6.1(a)(vi) of the Facility Agreement.
"Interest Expense" means, with respect to any Person for any
period of measurement, the excess, if any, of (a) interest expense (whether
cash or accretion) of such Person during such period determined in
accordance with GAAP (but excluding interest expense with respect to the
Specified Debt), and shall include in any event, without limitation,
interest expense with respect to all loans, bankers' acceptances and all
letter of credit fees under the Trade Credit Facility, the Interim Trade
Credit Facility and the New Trade Credit Facility, and, without
duplication, interest expense with respect to Indebtedness for Borrowed
Money, payments under interest rate Hedge Agreements (in the case of any
interest rate cap, amortized over the life thereof) and cash interest
payments made in respect of the Trust Stock over (b) interest income of
such Person for such period, including, without limitation, payments
received under interest rate Hedge Agreements.
"Interim Trade Credit Facility" means the Letter of Credit
Agreement dated as of July 27, 2000 among Warnaco, Group, certain of its
Subsidiaries and The Bank of Nova Scotia.
"Inventory" means all Inventory referred to in the Security
Agreement.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or Debt
or the assets comprising a division or business unit or a substantial part
or all of the business of such Person, any capital contribution to such
Person or any other direct or indirect investment in such Person,
including, without limitation, any acquisition by way of a merger or
consolidation and any arrangement pursuant to which the investor incurs
Debt of the types referred to in clause (i) or (j) of the definition of
"Debt" in respect of such Person.
"Joinder Agreement" means a Joinder Agreement in substantially the
form of Exhibit G of the Facility Agreement.
"L/C Related Liens" means Liens on any bills of lading, airway
bills, receipts and other applicable documents of title (and inventory and
goods covered thereby) delivered with respect to letters of credit issued
for the benefit of suppliers of inventory under the Foreign Facilities.
"Lead Arrangers" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Leasehold Assignments" has the meaning specified in Section
6.1(a)(v) of the Facility Agreement.
"Lender Parties" means the lenders, counterparties and other
providers of credit from time to time parties to the Covered Facilities.
"Leverage Ratio" means, on the last day of any Fiscal Quarter on a
Consolidated basis for Group and its Subsidiaries, the ratio of (i)
Consolidated Indebtedness for Borrowed Money as of such date to (ii)
Consolidated EBITDA for the four consecutive Fiscal Quarters ending on such
date.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means, collectively, the Intercreditor Agreement,
the Facility Agreement, the Collateral Documents, each Joinder Agreement
and the Secured Hedge Agreements, in each case as the same may be amended,
modified or supplemented from time to time.
"Loan Parties" means, collectively, Group and each of its
Subsidiaries who have executed and delivered this Agreement or any other
Loan Document.
"Long-Term Facilities" means, collectively, items A.2 and A.3 on
Schedule II of the Intercreditor Agreement, and any New Facility that has a
final maturity date after the Termination Date.
"Margin Stock" has the meaning specified in Regulation U of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Material Adverse Change" means any material adverse change in the
(a) business, condition (financial or otherwise), operations, performance,
properties or prospects of Group and its Subsidiaries, taken as a whole,
since January 1, 2000, (b) ability of the Loan Parties to perform their
respective obligations under the Loan Documents or (c) ability of the
Administrative Agent, the Debt Coordinators, the Collateral Trustee or the
Lender Parties to enforce the Loan Documents.
"Material Adverse Effect" means a material adverse effect on (a)
the business, condition (financial or otherwise), operations, performance,
properties or prospects of Group and its Subsidiaries, taken as a whole,
(b) the rights and remedies of the Administrative Agent, the Debt
Coordinators, the Collateral Trustee or any Lender Party under any Loan
Document or (c) the ability of any Loan Party to perform its Obligations
under any Loan Document to which it is a party.
"Material Real Property" means all fee-owned real property of any
Loan Party (a) having a fair market value in excess of $1,000,000 as of the
Effective Date, or if later, the date of acquisition thereof or (b) that
the Debt Coordinators determine is material to the business, condition
(financial or otherwise) operations, performance or properties of Group and
its Subsidiaries, taken as a whole.
"Material Leased Property" means all real estate leasehold
properties of any Loan Party other than those (a) with respect to which the
aggregate rental payments under the term of the lease in any year are less
than $1,000,000 or (b) that relate to a site the loss of which would not
otherwise have a material adverse effect on the production, distribution or
sales of Group and its Subsidiaries, taken as a whole, or in any material
geographic region where business is conducted at any time by Group and its
Subsidiaries.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"▇▇▇▇▇▇" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Mortgage" has the meaning specified in Section 6.1(a)(v).
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
is making or accruing an obligation to make contributions, or has within
any of the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
any Loan Party or any ERISA Affiliate and at least one Person other than
the Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any asset (an "Asset Sale") or the
incurrence or issuance of any Debt or the sale or issuance of any Equity
Interests (including, without limitation, any capital contribution) by any
Person, or any Extraordinary Receipt received by or paid to or for the
account of any Person, the aggregate amount of cash received from time to
time (whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with
such transaction (excluding any cash received by any Warnaco Entity as a
result of the sale or issuance of Capital Stock to, or receipt of a capital
contribution from, another Warnaco Entity) after deducting therefrom only
(without duplication) (a) reasonable and customary brokerage commissions,
underwriting or placement fees and discounts, legal fees and expenses,
finder's fees and other similar fees, expenses and commissions, (b) the
amount of taxes payable in connection with or as a result of such
transaction, (c) the amount of any Debt secured by a Lien on such asset
that, by the terms of the agreement or instrument governing such Debt, is
required to be repaid upon such disposition, in each case to the extent,
but only to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid to a Person that is not an Affiliate of
such Person or any Loan Party or any Affiliate of any Loan Party and are
properly attributable to such transaction or to the asset that is the
subject thereof (whether as principal, interest, prepayment premium or
similar expense) and (d) in the case of subleased property, the amount due
under the underlying lease; provided however, that (i) in the case of taxes
that are deductible under clause (b) above but for the fact that, at the
time of receipt of such cash, such taxes have not been actually paid or are
not then payable, such Loan Party or such Subsidiary may deduct an amount
(the "Reserved Amount") equal to the amount reserved in accordance with
GAAP for such Loan Party's or such Subsidiary's reasonable estimate of such
taxes, other than taxes for which such Loan Party or such Subsidiary is
indemnified, (ii) at the time such taxes are paid, an amount equal to the
amount, if any, by which the Reserved Amount for such taxes exceeds the
amount of such taxes actually paid shall constitute "Net Cash Proceeds" for
all purposes hereunder, (iii) the proceeds of any Asset Sale for an amount
less than $500,000 shall not constitute Net Cash Proceeds and (iv) the
proceeds of any Asset Sales of less than $20,000,000 in the aggregate that
are reinvested (or contractually committed to be reinvested) in assets used
or useful in the business of Group and its Subsidiaries within 90 days
after the date of such Asset Sale shall not constitute Net Cash Proceeds
(provided that the Debt Coordinators may extend the 90 day time period
specified in this clause (iv) by up to an additional 45 days if requested
by Group).
"New Facilities" means those credit facilities entered into on or
after the Effective Date (i) pursuant to Section 2.4 of the Intercreditor
Agreement, (ii) pursuant to which the lenders and other financial
institutions party thereto become a party to the Intercreditor Agreement by
executing and delivering to the Administrative Agent a Joinder Agreement in
accordance with Section 8.4 of the Intercreditor Agreement (except that,
with respect to the New Trade Credit Facility, the execution and delivery
of the Intercreditor Agreement by the Lender Parties party to the Trade
Credit Facility shall be sufficient to classify the New Trade Credit
Facility as a New Facility) and (iii) which will in no case, other than in
the New Trade Credit Facility, provide for any scheduled payment of
principal prior to the Termination Date. The Equity Derivative Notes shall
be Existing Facilities and not New Facilities. The New Trade Credit
Facility shall be a New Facility.
"New Trade Credit Facility" means the Credit Agreement, dated as
of the Effective Date, among Warnaco Inc., as U.S. Borrower, Designer
Holdings, Ltd., as Sub Borrower, Authentic Fitness Products Inc. and those
wholly-owned domestic subsidiaries designated therein as Warnaco Sub
Borrowers, Warnaco (HK) Ltd., Warnaco B.V., Warnaco Netherlands B.V. and
Warnaco Holland B.V., as Foreign Borrowers, The Warnaco Group, Inc., the
financial institutions from time to time party thereto as Lenders, Societe
Generale, as Documentation Agent, Citibank, N.A., as Syndication Agent and
Scotiabank, as Administrative Agent, as the same may be amended from time
to time.
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any obligation of
such Person of any kind, including, without limitation, any liability of
such Person on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 5.1(f) of the Facility Agreement. Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents and Covered Facilities include (a) the obligation to pay
principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document or Covered Facility and (b) the obligation to
reimburse any amount in respect of any of the foregoing that any Lender
Party or Agent, in its sole discretion, may elect to pay or advance on
behalf of such Loan Party.
"Old Five-Year Credit Agreement" means item A.1 on Schedule II of
the Intercreditor Agreement.
"Other Taxes" has the meaning specified in Section 2.12(b) of the
Facility Agreement.
"Parent Guaranty" has the meaning specified in Section 6.1(a)(iv)
of the Facility Agreement.
"Payment Obligations" shall mean all principal, interest, fees,
reimbursement obligations, letter of credit and bankers' acceptance
commissions, charges, expenses, attorneys' fees and expenses, indemnities
and any other amounts payable by the Loan Parties under the Loan Documents
and the Covered Facilities.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced:
(a) Liens, other than in favor of the PBGC,
arising out of judgments or awards in respect of which
Group or any of its Subsidiaries shall in good faith be
prosecuting an appeal or proceedings for review and in
respect of which it shall have secured a subsisting stay
of execution pending such appeal or proceedings for
review, provided it shall have set aside on its books
adequate reserves, in accordance with GAAP, with respect
to such judgment or award and provided further that the
aggregate amount secured by such Liens does not exceed
$5,000,000 in any one case or $10,000,000 in the
aggregate;
(b) Liens for taxes, assessments or governmental
charges or levies, that are permitted under Section
2.5(b) of the Facility Agreement;
(c) deposits, Liens or pledges to secure
payments of workmen's compensation and other payments,
unemployment and other insurance or social security
obligations, or the performance of bids, tenders, leases,
contracts (other than contracts for the payment of
money), public or statutory obligations, surety, stay or
appeal bonds, or other similar obligations arising in
each case in the ordinary course of business;
(d) mechanics', workmen's, repairmen's,
warehousemen's, vendors' or carriers' Liens or other
similar Liens arising in the ordinary course of business
and securing sums which are not past due, or deposits or
pledges to obtain the release of any such Liens;
(e) statutory landlord's Liens under leases to
which Group or any of its Subsidiaries is a party;
(f) leases or subleases granted to other Persons
not materially interfering with the conduct of the
business of Group and its Subsidiaries, taken as a whole;
(g) zoning restrictions, easements, rights of
way, licenses and restrictions on the use of real
property or minor irregularities in title thereto, which
do not materially impair the use of such property in the
normal operation of the business of Group or any of its
Subsidiaries or the value of such property for the
purpose of such business;
(i) statutory or common law Liens (such as
rights of set-off) on deposit accounts of Group and its
Subsidiaries and other Liens under the Covered
Facilities; and
(j) amounts delivered pursuant to Section 4 of
the Memoranda of Understanding as in effect on the
Effective Date and referred to in items B.18 and B.19 of
Schedule II to the Intercreditor Agreement.
"Person" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledged Debt" has the meaning specified in the Security
Agreement.
"Pro Rata" means on a ratable basis for each Covered Facility,
taking into account (without double counting) the principal amount of all
outstanding loans and reimbursement obligations, the undrawn amount of any
letters of credit, the outstanding amount of all bankers' acceptances, the
amount of all undrawn commitments and, in respect of any Derivative
Agreement, the ▇▇▇▇-to-market valuation thereof or total commitments
thereunder, as applicable, calculated as specified in the definition of
"Agreement Value".
"Receivables" means all Receivables referred to in the Security
Agreement.
"Redeemable" means, with respect to any Equity Interest, any Debt
or any other right or Obligation, any such Equity Interest, Debt, right or
Obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of the holder;
provided, however, that an Equity Interest shall not be considered
Redeemable solely because the holders thereof have the right to require the
issuer to repurchase such Equity Interest upon the occurrence of a "change
of control" or an "asset sale" if the terms of such Equity Interest provide
that the issuer may not repurchase or redeem any such Equity Interest
pursuant to such provisions unless such repurchase or redemption is subject
to the condition that all Payment Obligations be Fully Satisfied or is
otherwise permitted under this Agreement.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Responsible Financial Officer" means the chief financial officer,
the treasurer or the controller.
"Required Lenders" means, at any time Lender Parties owed or
holding at least a majority in interest of the sum of the (a) aggregate
principal amount of all loans outstanding at such time under the Covered
Facilities, (b) aggregate available amount of all letters of credit,
bankers' acceptances and other credit extensions outstanding at such time
under the Covered Facilities and (c) aggregate unused commitments at such
time under the Covered Facilities; provided, however, that if any Lender
Party shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Required Lenders at such time (A) the aggregate
principal amount of the loans owing to such Lender Party (in its capacity
as a Lender Party) and outstanding at such time, (B) such Lender Party's
pro rata share of all letters of credit, bankers' acceptances and other
credit extensions outstanding at such time under the Covered Facilities and
(C) the aggregate unused commitments of such Lender Party at such time
under the Covered Facilities. For purposes of the application of this
definition in Section 2.2 of the Intercreditor Agreement, Obligations owing
under Derivative Agreements shall not be counted in the determination of
"Required Lenders", except to the extent of net obligations owing to any
Lender Party under the Equity Derivatives, as calculated based on
▇▇▇▇-to-market valuations thereof (calculated as specified in the
definition of "Agreement Value") at the time of such vote or other action
by the Required Lenders under Section 2.2 of the Intercreditor Agreement.
For purposes of the application of this definition in respect of any
amendment or waiver of any provision of Section 2.7 of the Facility
Agreement, the sum of the (a) aggregate capital outstanding under the
Securitization Facility and (b) aggregate unused purchase commitments under
the Securitization Facility shall be counted in the determination of
"Required Lenders".
"Revolving Facilities" means those facilities numbered A.1 through
A.3, B.3, B.4, and B.10 through B.15 on Schedule II to the Intercreditor
Agreement, and any New Facilities that are revolving loan facilities.
"S&P" means Standard & Poor's Ratings Group, currently a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto.
"Scotiabank" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Secured Hedge Agreements" means any Hedge Agreement permitted
under Section 2.6(b)(v) of the Facility Agreement that is entered into by
and between any Loan Party and any Hedge Bank.
"Secured Obligations" has the meaning specified in the Security
Agreement, provided that, notwithstanding anything else to the contrary
contained herein or in any other Loan Document, all Obligations of any
Warnaco Entity in respect of Cash Management Services shall constitute
Obligations under the Loan Documents for purposes of the definition of
"Secured Obligations" as used in the Loan Documents.
"Secured Parties" means the Agents and the Lender Parties.
"Securitization Facility" means, collectively, the Receivables
Purchase Agreement dated as of the Effective Date among Warnaco Operations
Corporation, as seller, ▇▇▇▇▇▇▇ Street, Inc., as servicer, Liberty Street
Funding Corp. and Corporate Asset Funding Corp., as investors, The Bank of
Nova Scotia, as agent, and Citicorp North America, Inc., as the co-agent;
and any replacement or successor facility or facilities in a maximum amount
at any time of up to $300,000,000 and the form and substance of which are
reasonably acceptable to the Debt Coordinators.
"Security Agent" has the meaning specified in the preamble to the
Intercreditor Agreement.
"Security Agreement" has the meaning specified in Section
6.1(a)(ii) of the Facility Agreement.
"SG" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Short-Term Facilities" means, collectively, items A.1, A.4, A.7
and B.1 through B.17 on Schedule II of the Intercreditor Agreement and any
New Facility with a maturity date on the Termination Date.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which
any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the present
fair salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"Specified Debt" means Debt of Group incurred pursuant to that
certain (i) Memorandum of Understanding dated as of September 19, 2000
between Group and SunTrust Bank and (ii) Memorandum of Understanding dated
as of September 19, 2000 between Group and Scotia Capital (U.S.A.) Inc.
"Specified Facility" has the meaning specified on Schedule II to
the Intercreditor Agreement.
"Specified Facility Lender" means the Lender Party party to the
Specified Facility.
"Specified Parameters" means, with respect to (i) Debt, any such
Debt (A) which is (1) unsecured or (2) secured by liens which are fully
subordinated and junior in right of payment to the prior indefeasible
payment in full in cash of all Obligations under the Existing Facilities,
the New Trade Credit Facility and the Loan Documents, without rights of the
secured party under such Debt to receive any payment or distribution of any
kind or character or to vote or direct enforcement actions or remedies, or
block enforcement actions of the Collateral Trustee, in each case with
respect to the Collateral, until all Payment Obligations are Fully
Satisfied, (B) which is at or below a market rate of interest for
comparable instruments at such time, (C) with respect to which no principal
payments may be made prior to May 17, 2005, (D) which could not impair the
value of or have an adverse effect on the Existing Facilities or the
Covered Facilities or the rights or interests of the Lender Parties
thereunder and (E) which has no additional or more restrictive covenants,
defaults, required prepayment, required redemption or other similar terms
more restrictive or onerous on, or less favorable to, Group and its
Subsidiaries, or any of the Loan Parties, than those contained in the
Existing Facilities or the Covered Facilities and (ii) Equity Interests,
any such Equity Interests (A) which could not impair the value of or have
an adverse effect on the Existing Facilities or the Covered Facilities or
the rights or interests of the Lender Parties thereunder, (B) the economic
terms of which are at or below the market rate for comparable instruments
at such time, (C) with respect to which no redemptions may be made or other
premiums paid prior to May 17, 2005 and (D) which have no additional or
more restrictive covenants, defaults or other similar terms more
restrictive or onerous on, or less favorable to, Group and its
Subsidiaries, or any of the Loan Parties, than comparable terms contained
in the Existing Facilities or the Covered Facilities. Notwithstanding the
foregoing, any Debt or Equity Interest that would not satisfy the Specified
Parameter requirements solely because the holders thereof have the right to
require Group or any of its Subsidiaries to repurchase such Debt or Equity
Interest upon the occurrence of a "change of control" or an "asset sale"
shall be deemed to satisfy the Specified Parameter requirements if the
terms of such Debt or Equity Interest provide that Group or such Subsidiary
may not repurchase or redeem any such Debt or Equity Interest pursuant to
such provisions unless such repurchase or redemption is subject to all
Payment Obligations being Fully Satisfied, or is otherwise permitted under
the Facility Agreement.
"Specified Sale-Leaseback Transaction" means a transaction
pursuant to which a Warnaco Entity sells fixed assets to a third party in
an amount at least equal to the book value therefor and simultaneously
enters into an operating lease or a Capitalized Lease otherwise permitted
under Section 2.6(b)(iv) of the Facility Agreement with respect thereto, in
each case within 365 days of the date such assets were acquired.
"SSBI" has the meaning specified in the preamble of the
Intercreditor Agreement.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in
which) more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guaranty" has the meaning specified in Section
6.1(a)(iii).
"Supermajority Lenders" means, at any time Lender Parties owed or
holding at least 66-2/3% in interest of the sum of the (a) aggregate
principal amount of all loans outstanding at such time under the Covered
Facilities, (b) aggregate available amount of all letters of credit,
bankers' acceptances and other credit extensions outstanding at such time
under the Covered Facilities and (c) aggregate unused commitments at such
time under the Covered Facilities; provided, however, that if any Lender
Party shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Supermajority Lenders at such time (A) the
aggregate principal amount of the loans owing to such Lender Party (in its
capacity as a Lender Party) and outstanding at such time, (B) such Lender
Party's pro rata share of all letters of credit, bankers' acceptances and
other credit extensions outstanding at such time under the Covered
Facilities and (C) the aggregate unused commitments of such Lender Party at
such time under the Covered Facilities. For purposes of the application of
this definition in Section 2.2 of the Intercreditor Agreement, Obligations
owing under Derivative Agreements shall not be counted in the determination
of "Supermajority Lenders", except to the extent of net obligations owing
to any Lender Party under the Equity Derivatives, as calculated based on
▇▇▇▇-to-market valuations thereof (calculated as specified in the
definition of "Agreement Value") at the time of such vote or other action
by the Supermajority Lenders under Section 2.2 of the Intercreditor
Agreement. For purposes of the application of this definition in respect of
any amendment or waiver of any provision of Section 2.7 of the Facility
Agreement, the sum of the (a) aggregate capital outstanding under the
Securitization Facility and (b) aggregate unused purchase commitments under
the Securitization Facility shall be counted in the determination of "
Supermajority Lenders".
"Taxes" has the meaning specified in Section 2.12(a) of the
Facility Agreement.
"Termination Date" means August 12, 2002.
"TOPRs Documents" means the Indenture dated as of November 6, 1996
between Designer Holdings Ltd. and IBJ ▇▇▇▇▇▇▇▇▇ Bank & Trust Company, and
all related documents relating to the Trust and Trust Stock.
"Total Bank Outstandings" of Group and its Subsidiaries means, on
a Consolidated basis and without duplication, the following:
(a) all Indebtedness for Borrowed Money of such Persons,
(b) all Obligations of such Persons under the Securitization
Facility,
(c) all loans under the Trade Credit Facility and New Trade
Credit Facility not otherwise included as Indebtedness for Borrowed Money, and
(d) all amounts outstanding under the Securitization Facility
not otherwise included as Indebtedness for Borrowed Money.
"Trade Credit Facility" has the meaning specified on Schedule II
to the Intercreditor Agreement.
"Trust" means Designer Finance Trust, a trust formed under the
laws of Delaware.
"Trust Stock" means the Trust Originated Preferred Securities issued
by the Trust.
"Uncommitted Facilities" means, collectively, items B.6 through
B.15 on Schedule II of the Intercreditor Agreement.
"U.S. Credit Party" means Group and any Domestic Subsidiary (other
than Warnaco Operations Corporation).
"Warnaco Entity" means Group and any of its Subsidiaries.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person, all the outstanding shares of capital stock or
other Equity Interests of which (other than directors or similar qualifying
shares issued in compliance with requirements of local law) are at the time
owned directly or indirectly by such Person.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
PART II. INTERPRETATION AND CONSTRUCTION
The following shall constitute the rules of
interpretation and construction applicable to the terms defined herein and
in the Loan Documents.
(a) With respect to any term that is defined by reference
to any Loan Document (capitalized terms used in this Annex A are used as
defined herein), for purposes hereof, such term shall continue to have the
original definition notwithstanding any termination, expiration or
modification of such document except to the extent the parties may
otherwise agree in accordance with the terms of such document.
(b) In each Loan Document in the computation of periods
of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract
"as amended" shall mean and be a reference to such agreement or contract as
amended, amended and restated, supplemented or otherwise modified (by
waiver or otherwise) from time to time in accordance with its terms
(c) The words "hereof," "herein" and "hereunder" and
words of similar import, when used in any Loan Document, shall refer to
such document as a whole and not to any particular provision of such
document, and section, subsection, annex, appendix, schedule and exhibit
references are to those contained in or attached to such document unless
otherwise specified.
(d) Each reference to "days" in any Loan Document shall
mean calendar days, unless the term "Business Days" shall be used. Each
reference to a time of day in any Loan Document shall mean such time in New
York, New York, unless otherwise specified.
(e) The meanings given to terms defined in this Annex or
in any Loan Document shall apply to both the singular and plural forms of
such terms.
(f) Except as otherwise specified herein, each reference
in this Annex or in any Loan Document to any agreement shall be deemed (i)
to include all exhibits, annexes, schedules or other attachments thereto
and (ii) to refer to such agreement as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms of such Loan Document (to the extent such terms are applicable to any
amendment, supplement or modification of such agreement).
(g) Except as otherwise specified in this Annex or in any
Loan Document, each reference in this Annex or in any Loan Document to a
law or requirement of law, shall be deemed to refer to such law or
requirement of law, as the same may be amended, supplemented or otherwise
modified from time to time.
(h) Each reference in this Annex or in any Loan Document
to a Person shall be deemed to include such Person's permitted successors
and assigns.
(i) Each reference in this Annex or in any Loan Document
to accounting terms relating to the Loan Parties not defined in this Annex,
to the extent not defined, shall have the respective meanings given to them
under GAAP.